According to the Financial Times, the Australian mining group Fortescue has moved into expansion mode on the back of robust iron-ore prices that are now at an eight-month high. The reason for the rebound is the reflation efforts of the Chinese government after China experienced a relatively hard landing in property and shares, prompting China to give up on its plan to rebalance the economy.
The FT reports: that "the cost of the commodity used in steelmaking has risen almost 60 per cent since early September as Chinese steelmakers restock after running down their inventories during the third quarter of the year." This is testament to the about-face China has taken when faced with the consequences of the malinvestment of the previous debt binge.
In November, analysts were cheered by econom...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.