Interesting read (accumulate KZL under $1 for Long Term)...
By Stephen Green - Sep 9, 2010 Bloomberg Opinion
To understand what is going on with Chinas economy, just look at wheel loaders. They are tractors with a big shovel on the front to pick up and move earth or coal. Such machines are used to build roads and railways or to dig black stuff out of shallow mines.
China is, as we all know, an investment-heavy economy, so wheel-loader sales are a pretty good leading indicator: Companies only buy them if they plan to use one over the next 24 months. In July, 15,823 new loaders rolled out of the showrooms. That represented a 50 percent increase in seasonally adjusted sales compared with a year earlier.
This is hardly the kind of number that one would expect from an economy on the verge of collapse. Instead it is just one of many signs that Chinese gross domestic product is steadily expanding while inflationary pressures have moderated. In short, figures for August may well be what we have all been waiting for: a China sweet spot.
KZL Price at posting:
68.5¢ Sentiment: LT Buy Disclosure: Held
