First let me say it sickens me that Stan Kroenke would take the Rams out of St. Louis. Unfortunately, I also believe the group behind the lease renewal fell right into his plot. Being an elected official in government for 24 years and seeing people like Stan Kroenke prey on cities like St. Louis, I was and am in favor of a new stadium, and I believe without a new stadium and NFL team the downtown area of St. Louis is in trouble. With all that being said, I also believe the original lease renewal panel should have originally put forward their best effort to extend the lease for five years or so and then start the plans to build a new stadium instead of playing hardball with a guy who could care less about St. Louis. Until the Dave Peacock group became involved, there wasn’t much of anything happening to “truly” fix the situation, therefore falling into the hands of a man whose interests are clearly his own and not what’s best for St. Louis. Similar deals happen to communities every day; developers and business owners seek out communities large and small to obtain the incentives and dollars that most benefit them. So residents of Bethalto and residents of other towns who read this, please understand the importance of shopping and using small businesses in your community. I seriously do not believe small town businesses like Roma’s Pizza, Geno’s 140 Club, Tom Lane State Farm Insurance or any other small businesses in our community will ever come to the village and say, “If you don’t build me a new building and buy me land to put it on, and by the way give me some startup cash or I’m moving out of your town.”
Motto: Support you hometown businesses.
Last, you cannot blame Los Angeles for using all the necessary options available to them to attract new business or, in this case, bringing back business they previously lost to St. Louis. Again, greed of ownership was the driving force behind this as well as the greed of the NFL. Unfortunately L.A. wins this round, so come on baseball. Go Cards!
So I am going to try to summarize, based on everything I have read, about the Chinese economic bust and the glut they are contributing to and caused in the commodity markets, and rubber and steel industries.
China experienced a big boom in growth and roared its way into the industrial age pretty quickly. Their hunger for raw materials, steel, oil, metals such as copper and aluminum, coal and others which are too many to list grew faster than just about any other developing nation. With their boom, other nations in these markets expanded their operations to supply China’s hunger for those materials. Australia, which operates a large iron ore mine, expanded to yield more ore. Chile, which has a large copper mine, expanded; coal mines popped up everywhere in China to fuel their hunger, and alternative ways to extract oil such as fracking and the Canadian tar sands were implemented. During China’s growth the prices for these commodities supported the expansion of these operations. Well, all of these operations had to borrow money to expand their operations. They had to buy equipment, buy more land to expand operations, buy mineral rights so they can extract them, implement explorations to find oil, etc.
China was on top of the world. They became the No. 1 producer of steel with the capabilities to outproduce any other nation; albeit, a inferior product, but it is cheap. Same with rubber and aluminum. They consumed most of what they produced as they grew, so there was little to export. As their growth slowed, they didn’t taper off their production. They began shipping it all over the world and sold their goods on the free market. Their government subsidizes companies that produce these goods, so they are able to sell them on the free market cheaper than they sold them in their own country. So now the markets are flooded with these products. Well, the simple rule of supply and demand kicks in and prices fell to record lows. Now it costs more to produce product than what they can sell it for. Since China’s government subsidizes all of it, the companies weren’t losing money. Now the government can’t keep up with the mounting losses, they have to taper off production. Now all of these commodity suppliers that spent billions expanding their operations have loans to repay and China isn’t buying enough materials anymore. All of these expanded operations continue to produce their product and continue to sell it despite falling prices because of supply and demand. So now there is continuing glut in commodities. That’s one reason why we are seeing low oil prices, for example. These commodity suppliers have no choice but to continue to produce because they have to cover loan repayments. So they sell them at lower prices and continue to flood the markets. The more they produce, the lower the prices and less profit. Eventually, I think the inevitable will happen and some of these operations will go belly up. So now we are seeing governments place duties on Chinese products. Steel, for instance; yes, this eventually will raise steel prices. Another thing that will eventually raise prices is the lack of raw materials needed to produce steel once we use up all of the excess raw materials and we don’t have anyone left to supply the industry with the materials because they went belly up due to the low prices because of the glut caused solely by China.
So the question is, how long can everyone hold on and survive this mess? I speculate that some steelmakers will take advantage, or should be, of the low raw material prices and stockpile them. Once the market rebounds, or if it rebounds, to where it once was, they will have lower costs to produce and have larger profits. Bottom line is that the raw material or commodity market will take longer to recover because all of the excess that has been produced will have to be used up.
United Steelworkers Local 68