New York, New York (PRWEB) June 06, 2012
Out now, Winner Take All examines a world that is ill-prepared for the commodity supply-demand imbalances we face over the next decade in arable land, water, energy, and minerals.
Dambisa Moyo was named by Time Magazine as one of the 100 most influential people in the world. She is the New York Times bestselling author of Dead Aid and How The West Was Lost.
Jim Rogers, author of Hot Commodities says "Dambisa Moyo offers a smart primer for investors looking to make sense of the opportunities and risks in the commodity space today. You must read this book if you want to understand the reality of what's happening in the world today."
In coming years, China's transition from an investment to a consumption driven economy will intensify commodity use and continue to support convergence to western living standard--better quality foodstuffs, consumer durables, and commodity intensive 'white goods,' like TVs and refrigerators. In a world of scarce, finite, and depleting resource supply, these demand pressures will push commodity prices higher.
Contrary to popular belief, on a per capita income basis, China's capital stock and infrastructure build out are not excessive and remain substantially lower than in the world's leading developed economies. Moreover, evidence shows that across different commodities, tolerance of price increases is much greater in the emerging markets than in the developed economies; as such, demand destruction at higher prices will not offer a reprieve. Together these factors suggest the commodity cycle has a long way to run yet.
Moyo powerfully argues that while many market participants continue to focus on short term tactical factors, such as China's softening economic performance (which even in the worst case leaves her demand significantly higher than world supplies) and industrial data like electricity consumption, rail cargo volumes, and disbursement of bank loans, the fundamental economic data tell a different story. Structural factors continue to point to a bullish price story across the commodity complex.
In the aftermath of the 2008 financial crisis, commodity prices increased 150%, and there are roughly 25 wars raging around the world with their origins in commodities. With this in mind, China's political class is unique in having embarked on a systematic and aggressive approach to addressing the coming commodity headwinds.
Winner Take All explores the three-pronged strategy that underpins China’s global resource campaign and the political implications of China’s rush for resources.
First, China is building a symbiotic relationship with the "Axis of the Unloved;" these are regions such as Africa, Brazil, Argentina, and Kazakhstan that have been largely ignored as investment destinations by wealthier countries but nevertheless have vast sums of mineral deposits, oil wells, and tracks of arable land. For instance, Africa has over 60% of the uncultivated arable land remaining in the world.
Second, with over US$3 trillion in foreign exchange reserves, China's vast wealth means she can “overpay” for commodity assets. She faces not only a zero cost of capital but also virtually no competition in the global quest for commodities.
Finally, China becomes a monopsonist: the "go-to" buyer of the world's commodities and thereby the marginal price setter of the world's commodity prices. Already this is happening for copper and coal.
To find out more about the book or inquire about Dambisa Moyo's availability for media appearances visit http://www.dambisamoyo.com or email Kevin(dot)Currey(at)dambisamoyo(dot)com.