Mining Iron Ore Is Cheaper; Mining Tungsten is Cheaper; Is Now The Time For Foreign Investors in Domestic American Natural Resources to Fall In Love?

Implications: As the American dollar declines in value against the currencies of China, Australia, Brazil, Canada, Japan, and Europe it becomes much cheaper for those countries and/or their businesses to invest in the American domestic mining industry; to manufacture in the US using domestic American raw materials and labor; and to buy domestic American raw materials on long term contracts. Isn't this exactly what happened when foreign, mainly US, businessmen went to China for its low costs?

Analysis: A Chinese investor or businessman who enters into a long term contract in dollars for a supply of a natural resource produced in America is very likely to see his costs for that raw material decline over even the term of a three year contract. The same can probably be said for European, Brazilian, Japanese, and, even Indian, investors and businessmen.

Thus a foreign natural resource supplier that produces outside of the US, can, by investing in its domestic American production, obtain a supply base from which he can ship, what to him is lower cost (dollar denominated) material goods to customers paying in currencies other than dollars.

This is truly doing business on a global scale in a global market.

This scenario may already be playing out with iron ore and Chinese, Australian, British, or Brazilian mining companies supplying the Chinese or global steel making industry.

Ironically it is exactly the scenario that foreign investors and businessmen played out in the Chinese market just a very few years ago.

American businessmen have been using their assets to leverage buyouts of American companies at huge multiples and to entice subprime borrowers while foreign businessmen have been using the money we sent them for consumer goods to buy our resources, our banks, and the companies that still produce the goods the foreign businessmen want for their own domestic and export markets.

Short sighted self centered greed is the key factor in America's fiscal decline. Long term government and business strategic planning and businessmen who care about their countries, or, to be fair, who are made to care about their countries, have gotten China, Brazil, India, Europe, Korea, and Japan to where they are.