I've heard that we're in unchartered territory right now, with the US financial system collapsing and the whole world unifying in some bizarre interest rate price fixing scheme, but I figure basic rules of share market investing still hold true right? Buy blue chips in doom and gloom, it seems to me that if Rio Tinto is paying dividends in one year that total 15% of what you paid for the stock, that's a good deal, certainly better than bank interest, but if the US collapses and stuff, who is going to buy all the iron ore that support our economy here in Australia, that's what makes me uneasy. I've also heard what Peter Schiff has to say, and he thinks the US is doomed, yet still advocates that people buy Australian commodity stocks.wenjam: that's very interesting, though isn't it risky? they're a relatively new venture so the debt gearing must be high, do they pay dividends yet? (checks etrade) how the hell can the Price to Net asset ratio be a negetive number? Also, it says here the Price to Sales ratio is 28:1, Rio's is only 3, says FMG pays no dividends either... In financial fisticuff times like this I think I'd rather get Rio, well established, low debt, high dividends, couldn't possibly go wrong.Also, doesn't China own like 30% of US debt, they'll be hurt when the US declares bunkruptcy, why would their appetite for commodities stay so high when they are unsure of their continuing MASSIVE trade surplus (it'll still be big, just maybe not MASSIVE), I guess 1.3 billion people can use up a lot of iron ore domestically...

You are mainly correct apart from the fact that the US is doomed! I remember buying RTZ at £8 for a client about 15+ years ago (he still has them). If you have SPARE cash then buy RTZ and other similar stocks. In 5 years time you will be OK.

The US recession should not impact the iron ore industry since almost all of the ore is sold to China. in my opinion with the price of rio shares so low I would say now would be an excellent time to buy, I have rio shares and i'm not worried at all although personally I am more interested in FMG (Fortescue Metal Group) shares, I predict that they will at least tripple in value within the year and they are still very affordable (they dropped as low as $2.60).