A Hard Landing Down Under

From caixin.com

Australia's bubble is built on China's, and with no major stimulus in the offing, it may suffer a financial crisis in 2013. Mining has been a boom-bust industry throughout its history. The reason is the long development process of a mining asset. When demand pushes up prices for minerals, supplies take time to respond. Hence, prices can go very high in the initial phase of a demand boom. The eye-popping profitability draws all kinds of people into speculating for new mines, massively increasing the supply capacity years down the road. When the demand boom cools and prices decline, supply capacity keeps rising ... (full story)