Ian R. Campbell

Consider possible positives, as well as possible negatives

Today’s Detailed Commentaries World >> Mining: Consider possible positives, as well as possible negatives Mainstream and Internet media sources are increasingly, or so it seems, addressing near-term (and perhaps longer-term) problems and prospects faced by resource explorers, developers and producers in circumstances of:

The Gold Price & Quantitative Easing

If you read and accept the typical Internet headlines on the gold price you will no doubt believe that if the US Federal Reserve and other central banks introduce more quantitative easing in the weeks and months ahead that will spur the gold price to new heights. It may well, but if that does happen an important question has to be: why will that occur?

The International Monetary Fund – world economic outlook?

World >> Economy: The International Monetary Fund – world economic outlook? Yesterday the International Monetary Fund issued both its ‘World Economic Update’ and its ‘Global Financial Stability Report’. If you read the short Executive Summaries at the beginning of each, you effectively will have read them. That will take you less than 2 minutes in total, and you ought to take the time to do it – see links following this commentary.

China’s GDP growth and ‘dis-synergy’

Today’s Detailed Commentaries Asia >> China: China’s GDP growth and ‘dis-synergy’ ‘Synergy’ is a word typically thought of in ‘positive terms’, that is – 2 plus 2 equals 5. However, consider that synergy is broadly defined as “two or more things that function together to produce a result not independently obtainable” (Wikipedia), and hence can also be thought of in negative terms, as in – 2 plus 2 equals 3.

‘Spain on the brink?’, Trust and the banks

Why Read: Because economic risk in the Eurozone and elsewhere appears to be escalating, and what is said here describes what may prove to be the ‘biggest crack yet in Humpty Dumpty’s shell’. Commentary: It was some months ago that I began warning in this Newsletter that Spain was the country watch carefully in the context of its unemployment rates, federal government deficits, GDP and housing problems. At the time Spain didn’t seem to be the focus for most commentators that it was, and continues to be, for me.

Updated 2012 forecasts – made January 3, 2012

Updated 2012 forecasts – made January 3, 2012 As I am sure you do, I continuously monitor what I read that is written by others, and periodically check back on any forecasts they have made to see how those forecasts compare with what actually has happened. Based on those reviews, I decide which mainstream news writers and Internet commentators I am going to continue to follow.

Bank and Investment Bank credibility!  June U.S. Jobs Report

Why Read: Because current events could be a ‘logs that collectively break the camel’s back’. Featured Articles: Two articles today jump up and beg for notice:

• the first reports that JPMorgan has been subpoenaed by U.S. energy regulators to produce twenty-five 2010 and 2011 e-mails in conjunction with an investigation into whether it manipulated electricity markets in California and the U.S. Midwest; and,
• the second reports that a Spanish national court has ordered Rodrigo Rato, former IMF head and political ally of Spain’s Prime Minister, to face criminal fraud accusations over his recent stewardship of Spain’s fourth largest bank, Bankia SA. Bankia SA is the Spanish bank that came to the fore on May 9 when it was announced Bankia was estimated to need a 15 billion euro capital infusion. That estimated amount has since grown substantially, and is yet to be finally crystallized.

Bank related news

So called ‘living wills’ and Libor lawsuits Why read: Because, while you almost certainly have read and heard in the past two days of:

Market gains on eurozone announcement?

Why Read: Because the Friday, June 29:

• financial markets collective positive reaction; and,
• concurrent large increase in the gold price

to the Eurozone ‘agreement’ on bank funding and austerity measures vividly marks once again the ‘trading nature’ and volatility of those markets. Featured Articles: See linked articles at the end of this commentary.

The Great Depression Again?

Why Read: Because it is foolish not to consider the possibility of depression, particularly in the face of the preponderance of commentary over the past many months that rampant inflation is on the horizon Featured Article: An article published yesterday:

• carries a headline that says: “Is this 1931 all over again? Paul Krugman, Noriel Roubini, Niall Ferguson and more think so”;
• reports a number of economists, some of them particularly well known (and who the article infers “normally find little common ground”), are now considering whether we are about to see a repeat of the “economic catastrophe of 1931” – citing Niall Fergusson, Paul Krugman and Nouriel Roubini among others;
• reports Bradford DeLong and Barry Eichengreen, both economics professors at the University of California – Berkeley, said in a recent book preface “The parallels between Europe in the 1930s and Europe today are stark, striking, and increasingly frightening”; and,
• cites unemployment, youth unemployment, and financial instability and distress as ‘widespread’ as some of the reasons economists and others may be expressing the view that depression may be possible.

Canadian CEO’s Hold Onto Cash!

Why Read: Because those who operate business may well (read likely) have a better understanding of what is going on in their respective segments of the economy than do those who write in the mainstream media and on the Internet. Featured Article: An article last week reported on a recently conducted survey that ended June 5. The article says that “Canadian executives are sitting on cash and bracing themselves for higher financing costs, worried that turmoil in Europe will spill over into North America in the months ahead”.

Very Important News Today?

Why Read: Because if you understand how auditors and their clients function together, reporting delays seldom mean ‘good news’. Featured Article: A brief article this morning reports that:

• Spain’s Central Bank has notified each of the (now reported as four) audit firms currently studying the books of Spain’s banks that their reporting deadline has been moved from July 31 to September; and,
• later this week consultancies ‘Oliver Wyman’ and ‘Roland Berger’ are expected to report a preliminary estimate of capital needs for the entire Spanish banking sector.

Inflation or Deflation

Why Read: Because whether we are going to be faced with inflation or deflation in the developed countries, and the world economy generally is a critical question – and one that affects not just investors, but everyone.

Near-term Central Bank Intervention?

Why Read: Because with what is happening in the world and country specific economies today, can more quantitative easing in many countries be far behind?

Too Much Is Happening Too Fast!

Why Read: Because if I am right, Joe Kennedy may have had his shoes shined this morning. For any who do not understand the reference, recall Joe Kennedy (President John F. Kennedy’s father) saying that he got out of the stock market in 1929 when the person who shined his shoes began to give him stock advice.

Gold and Gold Miners

Why Read: Because almost every day now there is Media and Internet commentary on the current prices at which gold mining stocks are trading:

• some of which is excellent:
• some of which isn’t so excellent;
• a lot of which simplistic; and,
• some of which seems to be written from ‘vested interest perspectives’.

Canadians and Home Mortgages – A Surprising Statistic!

Why Read (if you are a Canadian): Because, if accurate, this is a surprising, and arguably foreboding, statistic.

American’s Focus on Europe Crisis!

Why Read: Because this commentary ought to focus you on how carefully you have to read things before reaching your own conclusions. Featured Article: A May 17 article published by the Pew Research Center suggests “the (American) public’s lack of interest in Europe’s (economic) woes is part of a broader indifference to international news”. The article, headlined ‘Public Yawns at European Economic Woes’ reports:

G8 Weekend Summit?

Why Read: To once again focus on the importance of ‘real’ economic growth going forward to developed and developing economies.

Q1 2012 Europe and Eurozone GDP!

Why Read: Because in our fiat currency world continuing GDP growth is of huge importance.