BRIC+ News & comments

Discussion in 'Business & Economics' started by Billy T, Aug 10, 2008.

  1. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    I am not sure, but think they loan dollars. China has been trying to decrease the percentage of dollars in its reserves and using dollars to buy real assets would make sense as defense against the falling value of the dollar.

    Note China typicaly gets loan paid back in commodities, not dollars. For example, China loaned Brazil's Pertobras 10 billion dollars and will get 200,000 barriels of oil / day for 20 years as the repayment of the loan. (IMHO - a bad deal for Brazil, as oil will be much more valuable in a few years.) It is really more like "lay-a-way" buying than a "loan."
    Last edited by a moderator: Nov 10, 2009
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  3. nirakar ( i ^ i ) Registered Senior Member

    If they really want to diversify out of the dollar making loans to Africa in dollars won't help. The loans need to be denominated in some other way to diversify out of the dollar.
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  5. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    No you posted before my final note pointed out that "loan" will not be repaid in dollars.
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  7. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    "... Brazil is not overly dependent on commodities or exports. Its economy is highly diversified, with personal consumption expenditures accounting for 60% of [gross domestic product] and exports accounting for only 14.3% of GDP. {some estimates are only 12%} Manufactured goods account for 60% of exports. Brazil is the world's seventh-largest manufacturer of automobiles and the fourth-largest manufacturer of airplanes. {including small "crop dusters" that run on alcohol, which has more power per pound of weight, but needs a larger volume tank so not good for long flights, which crop duster never make.}

    Brazil is the only BRIC nation that is both a stable democracy and at peace with all its neighbors. Brazil's financial system is healthy: Total credit to GDP is only 41%. Brazil has $233 billion in foreign exchange reserves, which is equal to 19 months of imports and fully covers the country's public and private external debt. {I.e. Brazil is a "creditor nation"}

    Brazil is also endowed with natural resources. It is the world's leading exporter of iron ore, coffee, soy, orange juice, beef, chicken, sugar, and ethanol. Brazil has 958 million acres of highly productive arable land, with 222 million acres that have yet to be farmed. The country generates 73% of its energy needs from hydroelectric power. {and about 10% from crushed sugar cane.} Brazil is also home to one of the ten largest oil reserves in the world, the Tupi field. {and now the larger "pre-salt" field" but it is deep and will be costly to produce.}

    Mortgage debt in Brazil is equal to only 2.5% of GDP, compared to 80% in the US. There is huge pent-up demand waiting to be unlocked in the housing sector. ..."


    Except for {Billy T inserts in these brackets} I might add the recent estimates for 4Q09 GDP growth are ~9% vs. US's ~1.5% or 6 times higher! With dollar falling and very low interest rates vs Brazil 8.75% basic interest rate, there is little wonder US to Brazil is a very popular "carry trade."
    Last edited by a moderator: Nov 19, 2009
  8. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    Russia & Brazil making plans (also Brazil concerned with new US bases in Columbia):

    “… Russia’s central bank will add Canadian dollars to its reserves… Russia aims to diversify its reserves, increase gold holdings and promote regional currencies in trade and finance to reduce risks posed by the dollar’s dominance. President Dmitry Medvedev has blamed the global financial crisis on an over- reliance on the U.S. currency. …

    Canada’s dollar, nicknamed the loonie, … strengthened as much as 1.2 percent to C$1.0453 per U.S. dollar… the highest since Nov. 18, and was up 1 percent at 8:07 a.m. in Toronto, from C$1.0580 yesterday. …The U.S. currency lost 13.3 percent against the euro in the past 12 months … The Russian currency gained 8.7 percent against the dollar in the past three months, making it the second-best performer of the 26 emerging market currencies tracked by Bloomberg.

    Russia is in talks with India and Brazil* to use their currencies in trade, … Russia {and China} already have agreements that allow the use of the ruble and yuan in cross-border trade. … Russia’s reserves, the world’s third largest, are currently made up of 47 percent U.S. dollars, 41 percent euros, 10 percent pounds and 2 percent yen. The country keeps about 35 percent of its international reserves in U.S. Treasury debt. … The central bank increased its gold holdings by 2.6 percent last month. The bullion reserve rose to 19.5 million ounces in October from 19 million ounces the previous month.

    Gokhran, the state precious-metals repository, plans to sell 30 metric tons of gold to Bank Rossii by the end of the year, Finance Minister Alexei Kudrin said on Nov. 18, according to the ministry’s Web site. The central bank is ready to buy all gold sold, RIA Novosti said two days earlier, citing Ulyukayev. “The central bank has in the course of several years replenished its supply of gold with the goal of diversifying our gold and foreign-currency reserves,” Chairman Sergei Ignatiev told reporters in Moscow on Nov. 18. Gold’s share in reserves has increased faster in 2009 than in prior years, he said. …”


    Billy T notes:
    Finances and the reserve mix are not the only things Russia and Brazil are talking about:

    The US is expanding or building 11 bases in Columbia, supposedly to help suppress Columbian drug production*; however, some are very near the Brazilian border and will have fighter bombers based on them than can attack most of Brazil, even without any aerial re-fuelling. The US has a long history of becoming interested in nations that have or discover significant oil reserves. (Brazil’s have greatly expanded in the last few years, but the full size is still unknown, however, some are suggesting they may be comparable to those of Saudi Arabia, but will be much more expensive to produce.)

    Thus, Brazil has become concerned about the US’s intentions and currently lacks the capacity to intercept these supersonic fighter bombers, should they invade Brazil. (Brazil only has some Mirage-2000 and a few F-5s)** Thus, Brazil is in advanced discussions with Russia to buy the latest generation of Soviet Ground to air defenses (the Tor-M2E) It can even shoot down missiles, which its earlier version, (Tor-M1) cannot. Both Iran and Venesula were sold the Tor-M1, which can shoot down supersonic planes but not high Mach number missiles. A Tor–M2E battery has four mobile launchers, each with eight “patriot like” missiles, and a mobile command coordination radar unit. Each battery will cost ~520 million dollars and provide air defenses for a relatively small area.
    *No one believes this cover story in South America. (Supersonic fighter bombers are hardly the tools to suppress drug dealer’s activity in the jungle.) The object is to be able to again try to topple Hugo Chavez. The CIA’s 2002 attempt only removed him from power for a few days as the masses and loyal army troops occupied the streets and demanded his return to power. (Fighter bombers may be able to prevent that, but it will be bloody. Chavez’s mismanagement of the economy will help cause his down fall too as food and fuel are now rationed by inflations.)

    **Brazil has already agreed to give France ~22.5 billion dollars for 50 troop carrier helicopters*** and five submarines, the last to be delivered will be nuclear powered. (Subs lurking near Brazil’s off shore drilling platforms can help protect them.)

    Brazil is negotiating with France, Sweden and the USA to buy 36 high performance fighter interceptors and budgeting ~10 billion dollars or that. (France’s Rafale, the most expensive plane, seems to be in the lead for the contract as they will completely transfer the technology, partially build in Brazil, and buy some Embraer troop transport planes. Later Brazil can build more and sell them in S. America.)

    Relations between Brazil and USA are now also strained because the US will hypocritically recognize the “elections” in Honduras soon (Sunday 30 Nov) to be run by the right wing military coup that expelled the elected president in his PJs one night at gun point from his country. The expelled president is now in the Brazilian Embassy, but will be thrown in jail if he leaves (or killed?). The US found great fault with the elections in Iran, but there at least politicians wanting to change the government were allowed to campaign, not threatened with death if they set foot on the streets. No South American country, other than the US’s puppet government in Columbia, will recognize this white wash of an election the de-facto military dictatorship / coup leaders will stage.

    *** I assume to counter attack the US's Columbia air fields in force if US invades Brazil. I think each helicopter can carry about 25 to 30 fully armed troops.

    Later by Edit: Here is 28Nov09 NYT article on Hondurian elections (and how the US has shifted its POV from condeming the coup to accepting its white wash via "elections."
    Article concludes with:
    "They really thought he was different,” said Julia Sweig of the Council on Foreign Relations, referring to Latin America’s view of Mr. Obama, adding, “But those hopes were dashed over the course of the summer."

    It seems the the US will once again support military coups that overthrow elected presidents - as they did in Chile, which then led to all of South America falling under military rule (and more than 50,000 liberals who wanted to restore democracy being killed. - many by being drugged and then dropped into the sea a few miles off shore from the CIA supplied helicopters.)
    Last edited by a moderator: Nov 28, 2009
  9. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    "... China will strive for a higher growth rate for retail sales in 2010 with a bigger contribution to next year's GDP increase, the Ministry of Commerce (MOC) said on Saturday.

    Consumption was the key drive force for China's economic recovery in 2009, said Jiang Zengwei, vice minister of commerce ...The country's economy grew 8.9 percent year on year in the third quarter this year, accelerating from 7.9 percent in the second quarter and 6.1 percent in the first quarter, according to the National Bureau of Statistics (NBS).

    The MOC will take measures to boost both rural and urban consumption in 2010 to push up economic growth, said Jiang. He said the MOC will expand the "old-for-new" program to encourage more consumers to buy new cars and home appliances on a basis of discount if they give up their old ones to sellers. ... The country's retail sales are predicted to increase 18.2 percent year on year in 2010, boosted by domestic consumption and income growth, according to a recent report by Beijing-based Renmin University of China.

    The NBS data showed retail sales in October rose 16.2 percent year on year to 1.17 trillion yuan (171.3 billion U.S. dollars).


    Billy T comment: China (and almost all thinking economists) now realize what I stated was needed many years ago. - Namely China needs a more domestic based economy with exports making less of their GDP. (US and EU will not be able to buy much if in depression by Halloween 2014, as I have predicted.)
  10. quadraphonics Bloodthirsty Barbarian Valued Senior Member

    The irony here, of course, is that Canada considers the strengthened Loonie to be a disaster, and will be working assiduously to reduce its value over the coming years. If one wants to diversify to avoid dollar depreciation, then buying currencies of countries that depend heavily on exports to the United States is a pretty stupid strategy.
  11. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    In general I agree. A currency growing stronger rapidly is certainly a disaster for the exporters, unless what they are exporting has a large portion of imported components and the exported product fills an essential need with few alternatives. This disaster is often called the "Dutch disease," after what happened to Holland’s exporters when a flood of money came with the discovery of North Sea oil and gas.

    However, it is far from a disaster for those parts of society causing the flood of money to enter. For example, Brazil's banks are making money as never before as foreigner send carry trade dollars here to invest in CD like accounts that pay some of the highest interest rates in the world. Likewise the simple farm folk of Brazil now see their purchasing power greatly expand, and city folks now travel outside of the country more. One of my wife's daughters has a boy friend in Switzerland and visits him at least once each month if he does not come to Brazil that month. The other daughter is currently in Disneyland Florida with children for the third time in 2009! Both buy the very latest in iphones, computers, imported electronics, digital cameras, for their children! - A new version every year. Etc.

    I don't think they consider the strong Real a "disaster." They earn Real and it buys at least 30% more in the USA now than it did at start of 2009.

    There is no logic to this and exports to China are rapidly growing (basic materials including lumber, ores, and processed metals, mainly, I think).

    Your logic is wrong because who a country trades with has nothing to do with the likelihood (or not) that its currency will appreciate.

    The Loonie is appreciating and the dollar is sinking in value. This just means that Canada will export less to US and sell more to Brazil where the real is appreciating even more rapidly. Canada, like China, does not need to export to the US the volume it previously did. Their domestic markets are growing and they can export to others with healthy economies. Admittedly this transition will not be possible next week, but when considering what is the better currency to hold in your reserves, as Russia just did; Cleary one is concerned with at least next year, not next week.

    Summary: A country wants to decrease the percentage of its reserves in a currency like the dollar, which is losing purchasing power, and increase the percentage in currencies like the Real and Loonie, which are growing in purchasing power. - It is as simple as that and who they trade with is of very little importance, so long as they have buyers for their products who are willing and able to buy or investors who want to invest in them (a demand for their currency making it ever stronger.) Because of Canada’s great natural wealth, especially in ores, many are investing in Canada. To do so they need to buy Loonies.

    I think Russia will be happy to sell dollars from its reserves and buy Loonies and not be very concern with whom the Canadians are trading. However, as noted in my reply to first part, if the Loonie climbs in value too quickly Canadian exporters of manufactured goods will be hurt. I expect that in the long run (a decade or so) both Canada and Brazil will be "economic colonies" of Asia, especially China - as I predicted many years ago - mainly exporting low value added materials, like ores and food.
    Last edited by a moderator: Dec 1, 2009
  12. quadraphonics Bloodthirsty Barbarian Valued Senior Member

    Good for them. I didn't say that a strong Real is a disaster for Brazil. I said that a strong Loonie is considered a disaster by Canada.

    In the first place, Brazil is not nearly as dependent on exports as Canada is. Exports make up almost 1/3 of Canada's GDP, compared to only 1/10 for Brazil. And in the second place, Brazil's exports sector is not nearly as dependent on the US as Canada's. Exports to the US account for approximately 27% of Canada's GDP, but only around 1.5% of Brazil's.

    That said, I do not think your anecdotes are reflective of the total relationship between Brazil and the US. Your relatives are largely consumers of imports from the US, but Brazil as a whole exports more to the US than it imports.

    Sure you don't want to rephrase that? Exchange rates are strongly influenced by the specifics of trade flows.

    There's no "and" there: that's only one event. And anyway, the dollar isn't "sinking in value" (i.e., purchasing power). Dollar inflation has been negligible recently. What's happening is that other currencies are appreciating.

    More to the point, the Canadian government considers this unacceptable in the long term, and will pursue monetary policies to correct this.

    Brazil cannot replace the US as a primary export market for Canada. The US imports about $400 Billion from Canada every year, double the amount of Brazil's total imports. Even if Brazil starts getting half of its imports from Canada (an extreme and unlikely case), it would barely make a dent.

    Who? Brazil? UAE?

    And let's note that both the Chinese and Canadian governments are running monetary policies designed to reduce the strength of their currencies relative to the dollar, and so preserve the US as an export market. So it seems that their finance ministers and central bank governors do not agree with your analysis.

    The "transition" you refer to would take generational time spans.

    I.e., who they trade with doesn't matter so long as they have healthy trade relationships with someone. Which I can agree with, of course, but it begs the entire question: if there isn't a serious alternative to the US for Canadian exports (and I don't see anyone with $400 Billion a year burning a hole in their pocket), then who are these buyers to be? And since Canada finds this unacceptable, and will pursue long-term monetary policies designed to reduce the exchange rate of the Loonie with the dollar, any plan to hedge against dollar depreciation by diversifying into Loonies is doomed. It might make sense as a short-term speculation, but not as structural diversification.

    The Canadian economy - by dint of geography - is simply far too intertwined with the US economy for Canadian currency to serve as an effective hedge on US currency.
  13. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    Up to here I agree with your post, but think you are in error here.

    I.e. as I recall, Brazil is one of the few countries that the bi-lateral trade balance is in the US's favor. It naturally should be that way as most of Brazil's exports are agricultural products, like soy (and the US is an exporter of that too). Certainly, except for orange juice, the US imports little food from Brazil (perhaps some shrimp?).

    It could import alcohol much cheaper and with ~8 to 10 fold reduction of CO2, and other GHGs vs. the alcohol US produces from corn, heavily fertilized in Iowa to speed its growth, prior to the first freeze, but with tariffs and subsidies to make Iowa's corn based alcohol economically viable, the US does not import much alcohol from Brazil. Some slips in by pretending to come from Caribbean countries (has some final processing there).

    Likewise the US is rich in iron ore, Brazil's main non-agricultural export so it is shipped to China and EU, but not the US.
    No, I don't see any need to rephrase because if your "specifics" refers to the net trade balance we completely agree.

    If you mean which specific countries the trade is with then we disagree and I stand by my statement that the rise or fall of a country's currency depend only on the net demand for its money (not where that demand comes from). I.e. a total trade balance is favorable, plus the net flux of FDI (including net funds transfer home by "ex-pats") that will make the currency value rise, at least in the long run. (In the short run the central bank can buy up some of the influx funds to restrain the rise - Brazil's sure has. In recent years central bank has added nearly 200 billion dollar to Brazil's reserves and become a "net creditor nation." - foreigners owe Brazil more than Brazil owes foreigners.)

    Again, I admit that Canada cannot quickly replace the US market by increasing domestic sales and exports to others, so it will not happen in next few years (and US would be hard pressed to live without importing Canadian energy.) But when considering whether or not the Dollar or the Loonie is the better Choice to increase as a percentage of national reserves, I think Russia made the correct choice - the Loonie.
    We are not speaking of purchases in the US domestic market with dollars, but of the dollar vs. Loonie's purchasing power in the future OUTSIDE of the US.

    I agree that for purchases inside the US there is certainly no decrease in the dollar's purchasing power (perhaps a very significant increase for buying major ticket items like a house, vacation trip with nights in a hotel, etc.) But we are not talking about dollars domestic purchasing power - you are attempting a "bait and switch" but I'm not buying it. We are talking about dollar vs. Loonie choice to be held as Russian reserves, etc.

    I'm sure they will try, just as Brazil has, but "leaning against the wind" rarely causes its direction to change.
    Certainly not Brazil alone, but total of growing economic + domestic marker expansion can. Just today the IMF estimated that by 2014 The BRICs and several other non-US, non-EU would be responsible for 58% of GDP growth (more than US +EU). Thus there are lots of new markets for Canada to conquer etc. If Canada can teach the Asian to eat wheat bread like they do rice - Canada will not want for export markets.
    Partially false as China has Yuan pegged at 6.83 to the dollar since July 2008. I do not know about Canada, but assume they are, like Brazil, trying to slow the rate of increase in value of the Loonie. This does not mean they "disagree with me" - just the opposite they both recognize and "agree with me" that they need to buy time for the transition to domestic and non-US exports for the simple reason that US has been living on credit and cannot continue to buy with borrowed money as it did.
    I think much quicker than that. (the IMF's by 2014 more than half of GDP growth outside of US and EU is too short a time for US market not to be Canada's largest still - I said "a decade or so" would be required.
    Except for your last sentence, we agree on this, but have some difference in our concepts as to how fast they US market can contract (especially if there is the run on the dollar I have predicted to occur no later than Halloween 2014) and how rapidly the consumption outside of US and EU is growing. On the last sentence I think buying loonies for reserve makes more sense long term (decade or so) than short term (a year), but we will need to wait and see who is correct.
    Last edited by a moderator: Dec 2, 2009
  14. quadraphonics Bloodthirsty Barbarian Valued Senior Member

    Actually on second thought I think you're right about that, although the balance of trade is quite small compared to the total trade volume. It's also volatile, owing to the exchange of bit-ticket items like aircraft and industrial machinery, and so is liable to switch sign from month to month.

    If country A runs a trade deficit with country B, that puts pressure on the exchange rate between their currencies, no? And not on the exchange rates with country C (whom neither trade with).

    Perhaps on purely political or symbolic grounds. In monetary terms, it's not going to pay off.

    Same difference. A dollar doesn't buy any fewer barrells of oil for Russia, or fewer bushels of wheat, or fewer Chinese exports than it did a few months ago. The only thing it buys less of is certain currencies (well, and gold). Which is to say that purchasing power of the dollar is unchanged, and certain other currencies have appreciated.

    They've successfully run such a monetary policy for decades already. Likewise, China has done so for more than a decade, and much more aggressively than anything Canada is countenancing.

    GDP growth is not the same thing as growth in markets for Canadian imports. Many - most? - of that growth is in export-oriented economies, which are not going to want to slurp up lots of Canadian goods. It will be generations before these developing countries mature into large import markets, by which time they will not be accounting for such spectacular growth.

    Exactly; compared to their previous policy of allowing a slow ascent of the yuan, that is a very clear sign that the yuan will not be allowed to move away from the dollar any time soon.

    They're looking to reverse it.

    If the US economy undergoes "rapid collapse" then the Canadian economy will not be far behind. As you've just stated, Canada's dependence on the US import market is far too extreme to be unwound in any kind of quick fashion - to the point where, you contend, they must actively work to forestall such an outcome by propping up the dollar. They're in bed with us, and are not doing much of anything to climb out that I can see.

    And why should they? Geography has their fate lashed to ours no matter what they do.
  15. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    True geography and US needs of Canadian energy will make US Canada's major trading partner for a long time, but:

    "... Canada would like to further economic ties with China, said visiting Canadian Prime Minister Stephen Harper in Shanghai on Friday. {4 Dec09} Harper announced the launch of four new trade offices in China by the Canadian government in cooperation with the Canadian Commercial Cooperation at a welcome banquet here Friday night.

    The new offices are in addition to the two International Trade Minister Day launched in April, said Harper, adding that "Together, they will enhance our ability to support even more commercial links in exports, investment and innovation between our two countries."

    According to Harper, since 2005 alone, two-way merchandise trade between the two countries has grown steadily each year by an average of more than 14 percent. During this period, Canadian exports to China have grown by more than 3 billion dollars. The total bilateral trade is now valued at over 53 billion dollars. China is Canada's second largest merchandise* trading partner and third largest export market. ..."


    Billy T comment:
    Not sure, but I am confident that US imports in last 12 months (a recession period) from Canada have decreased from the level of the 12 prior months. I do not have numbers, but would like to know how many years it would be (if Canada’s trade with China continues to grow by 14% annually) until China is Canada’s number one export market? Perhaps that is so far in the future, than only asking about the non-energy trade is more reasonable. I do not know what impact the new health care plans will have, but perhaps Canada will sell less medicines to American when they take effect.

    In Brazil’s case, China passed the US to become the number 1 export market in early 2009 (or possible late 2008?).

    * I think that excludes energy, which the US buys a lot of from Canada.
    Last edited by a moderator: Dec 6, 2009
  16. kmguru Staff Member

    Canada export to the USA in 2008 = USD $340 Billion
    Canada export to China in 2008 = C$10.5 Billion
  17. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    Thanks. As I guessed it will be a very long time before that difference is reversed by 14% greater growth in exports to China than to US.
    Do you know how much of the$340 billion is oil and/or gas sold to US? I.e. what is the "merchandise & services" only trade with the US?
  18. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    Much of China's technology is copied from others (Or even just imported) but here is one Chinese developement:

    "... China has invented a carbon aircraft brake disk, breaking foreign companies' monopoly on the product. ... The brake disk has proprietary intellectual property rights and its function has reached international level, according to the appraisal meeting.

    The disk costs half of the similar products overseas and can save about 100 million yuan (14.6 million yuan) a year for the Chinese civil aviation industry.

    The disk applies the carbon-carbon composite materials, which has high intensity and stiffness. It's 40 percent lighter than the traditional metal materials and can resist temperature as high as 2,000 degrees Celsius.

    The disk has got the manufacturing license for the Boing 757 and Airbus 318/319/320. ..."

  19. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    Part of why China is growing rapidly:

    "{China} has very friendly taxation policies -- China doesn't have a capital gains tax or an estate tax or a property tax. Instead, the country rewards its owners of capital, allowing maximum wealth creation. ... The majority of China's policymakers are engineers, and engineers tend to make and build devices that create wealth, rather than redistribute it. Currently, all three of China's top government leaders -- President Hu Jintao, Premier Wen Jiabao and Congressional Chairman Wu Bangguo -- were engineers by training. ..."

    Please Register or Log in to view the hidden image!

    "The High-Speed Passenger-dedicated Wuhan-Guangzhou Railway, which extends to 1068.6 km in full length and scheduled to be operational by the end of 2009, has made its trial operation on wednesday " = 9Dec09 - they are 12 hours ahead of US and this news is "hot off the press" (I.e it is already 10Dec09 in China.).

    I doubt if US will have the equal for many years, if ever.

    Brief text does not tell top or average speed, but China considers "high speed" (rail) to be > 200km/ hour. (200km/h is 125mph) As train and rails are new, I bet it does better than 300Km/h in the straight stretches, perhaps even 200mph.
    Last edited by a moderator: Dec 9, 2009
  20. quadraphonics Bloodthirsty Barbarian Valued Senior Member

    Nor will the US have population densities to equal China for many years, if ever. Which begs the question of why we should want a comparable high speed rail system, in the first place. It's not like we have a billion people crammed into an area the size of the Southwestern US, or something.

    That said, the US already has one high speed rail line connecting Boston to Washington DC, and in about 1 year construction will start on a much faster line linking San Diego to San Francisco. There is also an overarching federal effort to expand existing high speed rail in the northeast to connect from Canada to the South, as well as regional high speed networks in Texas, Chicago-area and the Northwest. All of which takes many years to build, of course, but it's not as if the US lacks a high speed rail policy or something.
  21. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    I think the US population density is more than adequate to support high-speed rail between the larger cities as there are so many airplane flights connecting between them that some airports must land a plane ever minute at peak load times.

    I.e. your "not enough density" argument is nonsense.
    That is false. To eliminate the time lost in stops I looked up schedule for the non-stop Amtrak express from Philadelphia to DC:

    The fastest Amtrak train between Philadelphia and Washington DC is called Acela Express. It makes the 120mile (193Km) trip in 1 hour 37 minutes, without any stops (AFAIK - All other Amtrak trains take approximately 2 hours for this same trip as they have stops.)

    That is 74.23 mph or 118.7km/h. - Less than 75mph is hardly what one can call “high speed rail” and this DC to Boston line is the most heavily traveled in the US.

    Perhaps you can give data on some other Amtrak trip that is faster?
    That is good to hear, but I have my doubts it will ever happen because of other government policies; such as keeping gasoline taxes at about half the level of other developed countries do and the huge government expenditures on super highways. - All actions that encourage many NYC area residents to even drive down US I-95 to Disney land in Florida instead of take the train. If wealthy they may even fly and rent car at the airport.

    I.e. I see no evidence (other than "lip service") that the US is about to reverse its long standing policy of promoting auto travel and suppressing passenger rail travel. The US government attitude, in practice seems to be "railroads are for freight" - in fact several now haul only freight.

    I agree the construction would take years, but think not one real construction actions has started on any of these new routes you mention – it is just talk, AFAIK. Actions speak louder than words: The government money is going into making roads, airports and air traffic control systems better – able to carry more traffic.
    Last edited by a moderator: Dec 10, 2009
  22. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    Here is the complete set of links in the economic section of today’s People’s Daily:

    China's November CPI rises 0.6%
    China urban fixed-asset investment up 32.1%
    China's retail sales up 15.8% in November
    Mexico City sees 8,500 business closures
    Central SOEs to adopt EVA evaluation next year
    China's imports, exports up 9.8% in November
    China's new loans rise to 294.8 bln yuan in Nov.

    Note: the domestic market increase is almost twice that of the exports.
    Also note that domestic loans are also increasing.

    A few years ago, I noted that few Chinese even knew what a credit card was. Now about 10% of city dwellers uses them.

    SUMMARY: China is making rapid progress to becoming like Brazil – an economy that mainly serves it internal wants and needs.
  23. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    “… China bets big on pipelines 08:17, December 14, 2009
    President Hu Jintao is expected today to announce the opening of a massive natural gas pipeline through Central Asia …The 1,833-kilometer line connects Turkmenistan, Uzbekistan and Kazakhstan. One of the two sections of the pipeline has been completed, and the other section will be operational next year.

    "With an annual expanded transmission capacity of up to 40 billion cubic meters of gas from Turkmenistan, the route will fill the natural-gas gap,"… With a natural-gas shortage hanging over China, the China- Central Asia gas pipeline will help meet China's surging demand …{pipeline} will pump gas to China's second West-East natural gas transmission pipeline project and benefit 14 cities and provinces in the Pearl River Delta region, the Yangtze River Delta and central and western China.

    By 2011, the pipeline will transfer up to 13 billion cubic meters of natural gas. Its capacity could reach 30 billion per year, plus an additional 17 billion cubic meters of gas from Turkmenistan purchased by China National Petroleum Corp (CNPC), one of China's largest oil and gas producer and supplier. China's gas shortages are expected to grow to 30 billion cubic meters next year, and the figure could reach 40 billion in 2015, …”


    Billy T comments: New skyscrapers, rail and pipelines is why China is making and buying so much steel – more than rest of the world’s total, I believe. Just yesterday China announced a new large iron ore discovery, but did not tell the quality so that may just be an effort to hold the price rise down. (Brazil’s Vale is there largest supplier and has very high purity ore,* which compensates for the greater shipping distance than from Australia.)
    * >95% pure Fe2O3, as I recall.

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