Friday, October 15, 2010

China's Cotton Dragon Vs World Hemp Dragon

Sometimes when you pause and look at something in a new way, how you respond to a problem changes. If you go against the 'trend' and you look at a thing backwards, it changes not only your perspective; but it changes how you see your way ahead.

One example of this is the currency revaluation / devaluation we want to sell in your markets hysteria .. when the real concern is a countries PURCHASING POWER. That is one example of looking at a problem backwards. All eyes are on 'exports' .. for example, China's exporting power .. when in reality those exports come FROM SOMEWHERE .. they come from resources.

When I look backwards at the current hysteria around currencies .. I see BUYING POWER .. a country has the power to buy cotton. That is one example of buying power that translates into production and exports = a countries wealth.

Part of buying power is also about STRATEGY, and China's advantage over the rest of the world is that they have a national strategy. There is no 'invisible hand' of the market .. they know what they are doing.

Oct. 14 Bloomberg -- Cotton futures climbed to a record on signs that China, the world’s largest user and buyer, may boost imports to meet demand from textile makers.

Commodity speculation can makes prices fluctuate (in my opinion bringing instability into the market), but speculation is (in my view) the shadow cast by large movements of resources, catching the beady eye of futures traders.

As the U.S. Dollar fell to an all-time low commodity buying sprees can send prices soaring, as many commodities traded on the open market are priced in the U.S. Dollar. But this type of speculation obscures the undervalued world of real resource trades.

Why would you buy a cotton T-shirt or cotton jeans? Because someone makes it and sells it to you. Why would textile producers buy cotton? Because you will buy their products. I do not agree with the theory that, demand fuels supply. Because if Hemp jeans were on the market I am sure the demand would be just as high. So, where are the Hemp jeans?

This is what I mean about looking at an issue backwards .. you can often end up looking at the future and seeing the outcome when you understand 'seed-prices', flooding, export restrictions, damaged crops, lack of water and last of all 'demand'.

Then you have special interest conflicts where, for example, India regulate cotton exports in an attempt to protect its own textile producers from high raw cotton prices. A high world market demand for raw cotton pushes prices to an all time high at a time when Indian cotton farmers have produced a bumper harvest. However, the Indian government’s policy to regulate cotton exports for the domestic textile industry, means that Indian farmers face heavy losses as a result of deferment of cotton exports.

China's Cotton Dragon Vs World Hemp Dragon
Looking backwards at an approaching world crisis in production and supply, changes how you deal with that problem. For example, rather than politicians and bankers arguing over who floats or suppresses the value of their currencies the action would be to implement a realistic move on the world market chessboard.

As institutionalised observers tear their hair out over China's revaluation of their currencies purchasing power, not a tweet is heard about Germany, whose exporting engine power has a currency value higher than the European Euro value shared by many European countries all in one pot. °>)

China are not only buying cotton to fire up their textile production into 2011, but they are also planning long term production of hemp fibers while the rest of the world argues about currency manipulations. It seems as though the West has become merely a consumer-of-goods as the East becomes mainly a producer of goods.

The artificial suppression of the use of hemp-fibers other than in China and Canada is also a form of currency manipulation. Political interests stop farmers growing hemp fibers locally, therefore artificially suppressing the supply of hemp fibers to potential local producers. Destroying 'demand' and the potential for increasing local and national demand of home produced textiles. Not only textiles .. as hemp fibers can be used in building, insulation, plastics, cordage, textiles, fabric, compressed hardboard, flooring, car manufacture, paper, food, oil, fuel etc and so on ..

You can sit and do nothing but write laws and consume the products of emerging nations or you can get up off you '-)s and produce something yourself .. as the most optimistic outlook will be that the World's hemp dragon will save the world from future crop crisis, weather anomalies, export restrictions, trade wars and intellectual arguments.

Let the intellectuals sit around and argue .. let the political alpha-dogs beat their chests and howl at the moon .. but for the rest of us .. we have to get something done and we have to do it soon. It does not matter what state the world is in, planting hemp and supplying local fabric textiles will ease the pain. Oh! Hemp can be used for bandages too!

Keywords: Is Belgium Next? - Fall In Euro Boosts Exports - China Use Hemp for Poverty Alleviation - Why Hemp Could Save The World