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We Must Start Digging Our Way Out of Canada’s Mining Dilemma
We Must Start Digging Our Way Out of Canada’s Mining Dilemma
It sometimes seems people in the mining and fossil fuel industries — along with their government promoters — don’t believe in the future. What else could explain the mad rush to extract and use up the Earth’s resources as quickly and wastefully as possible?
Global mining production, including fossil fuels, has almost doubled since 1984, from just over nine-billion tonnes to almost 17-billion in 2012, with the greatest increases over the past 10 years.
It’s partly to meet rising demand from expanding human populations and supply the cycle of consumerism that fuels the global economy through planned obsolescence, marketing unnecessary products and wasteful technologies. And, as the British Geological Survey notes, “It may be uncomfortable to acknowledge, but wars have been the drivers for many of mankind’s technological developments. Such technologies depend on secure supplies of numerous mineral commodities for which demand inevitably escalates in times of war.”
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World Bank forecast causes markets to tumble
World Bank forecast causes markets to tumble
Copper prices fell and shares plummeted across Europe as markets reacted to the World Bank’s decision to cut its economic forecasts for this year and next.
The price of copper, regarded as a barometer of global economic demand, fell as much as 8% to a low not seen for more than five years after the World Bank said the world economy was too reliant on the US.
The bank blamed reduced prospects for growth in the eurozone, the state of finances in Japan and some big emerging economies for its decision to cut its 2015 global growth forecast to 3% from 3.4%.
Germany’s Dax index fell 0.75%, dragged down by steel producer ThyssenKrupp, which fell 3.6%. In France the CAC index dropped 0.9% as rival steel company ArcelorMittal lost 4.5%.
In London, copper miner Antofagasta fell more than 10% and was the biggest loser in the FTSE 100 index, which was down 1.3%. All the 10 worst performers in the index, including Glencore and oil producer BG Group, were commodities companies. Brent crude fell 1.7% to $45.78 a barrel.
“Europe has been pretty sluggish, China’s still got that property overhang, Japan’s entered recession. You’ve got the US and UK going fine, so it’s a patchy global growth picture – but it’s one that has definitely deteriorated from six months ago,” UBS analyst Daniel Morgan said.
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Either Crude or Copper
Either Crude or Copper
The primacy of the monetary pyramid in 2015 is not really about money as it is all ideology. If you believe that monetary policy provides “stimulus” then you immediately remove all thoughts of any economic decline during times when monetarism is most active. Since “it works” then all else must fall into place. Contrary indications are thus given extraordinary lengths to maintain logical consistency.
Economic commentary as it exists is incredibly short-sighted, though there is no reason to believe that is anything other than exactly what I stated above. The state of economics even as a discipline has internalized Keynes so deeply that all that matters is what happens month-to-month. That makes it easier to maintain the status quo of opinion about “stimulus” – in the short run it is very easy to find a suggestion for something behaving “unexpectedly.”
That was certainly the case with crude oil prices these past few months, as the initial impulse was uniformly and incessantly prodded to over-supply. Again, the reasoning behind that was simply since “stimulus” works and it was being practiced and replicated all over the world there was no possible means by which “demand” might drop, and so precipitously. After a few weeks of oil “unexpectedly” falling further, re-assurances were more difficult and increasingly derivative by nature.
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Could The Oil Bust Last?
Could The Oil Bust Last?
The oil industry has experienced boom and busts before, but the depths to which oil prices have plunged have surprised everyone. Could the bust now persist much longer than many think?
It is not just oil that has seen a bust. Over the last decade and a half, the global economy has witnessed a massive commodity boom, with prices rising for all sorts of raw materials, including gold, iron ore, oil, gas, copper, wheat, corn, and more. But the commodity “super-cycle” appears to be over, with vast new supplies having come online in the last few years.
As prices rose through the 2000’s, multinational companies extracting all sorts of commodities planned billion dollar projects. With new mines, new oil and gas fields, and other commodity supplies hitting the market at the same time, a bust has ensued.
Related: Gains From Low Oil Prices Could Be Wiped Out This Year
“Supply has been outstripping demand not because demand has been particularly weak, but because there was too much supply,” Stephen Briggs, a commodities analyst at BNP Paribas SA, told The Wall Street Journal. “It looks like this won’t change anytime soon.”
…click on the above link to read the rest of the article…
Oil Prices as an Indicator of Global Economic Conditions
Oil Prices as an Indicator of Global Economic Conditions.
West Texas Intermediate sold for $105 a barrel at the start of July, but ended last week at $58. The most important factor has been surging U.S. production. But another reason oil prices have slid so much is weakness in demand for the product, which may be related to a slowdown of overall world economic growth. Here I comment on the importance of that second factor.
For example, the price of copper fell from $3.27/pound to $2.93, a 10% drop over those same six months. This of course has nothing to do with the success of people in getting more oil out of rocks in Texas. Softness in demand for commodities like copper and oil may be one indicator of new weakness in the world economy.
Not Just Oil: Guess What Happened The Last Time Commodity Prices Crashed Like This?…
Not Just Oil: Guess What Happened The Last Time Commodity Prices Crashed Like This?….
It isn’t just the price of oil that is collapsing. The last time commodity prices were this low was during the immediate aftermath of the last financial crisis. TheBloomberg Commodity Index fell to 110.4571 on Monday – the lowest that it has been since April 2009. Just likejunk bonds, industrial commodities are a very reliable leading indicator. In other words, prices for industrial commodities usually start to move in a particular direction before the overall economy does. We witnessed this in the summer of 2008 when a crash in commodity prices preceded the financial crisis in the fall by a couple of months. And right now, we are witnessing what may be another major collapse in commodity prices. In recent weeks, the price of copper has declined substantially. So has the price of iron ore. So has the price of nickel. So has the price of aluminum. You get the idea. So this isn’t just about oil. This is a broad-based commodity decline, and if it continues it is really bad news for the U.S. economy.
Of course most Americans would much rather read news stories about Kim Kardashian, but what is happening to the prices of these industrial metals at the moment is actually far more important to their daily lives. For example, when the price of iron ore goes down that is a strong indication that economic activity is slowing down. And that is why it is so troubling that the price of iron ore has almost sunk to a five year low. The following comes from an Australian news source…
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Australia’s Dutch Disease More Severe Than Canada’s: Currencies – Bloomberg
Australia’s Dutch Disease More Severe Than Canada’s: Currencies – Bloomberg.
The currency market is diagnosingAustralia with a worse case of “Dutch Disease” than Canada as the commodity-heavy economies suffer the fallout from slumping prices.
After a decade-long boom in raw materials that pushed up their exchange rates, manufacturing in both countries is shrinking and some economists are drawing parallels to the Netherlands when it became too dependent on natural gas after its discovery there in 1959. Traders are betting Australia, which this year announced the closure of its last auto plant, may be slower to adapt to the current plunge in commodities than its North American cousin.
Canada’s dollar is outperforming its antipodean counterpart by the most in a year against an index (BCOM) of developed-market peers, and forecasters from Sydney-based Westpac Banking Corp. to Toronto-based Royal Bank of Canada predict that trend will continue. National Australia Bank has recommended betting against the Aussie versus the loonie since March, and says it has no plans to abandon the trade.
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How will Saudi Arabia respond to lower oil prices? | Econbrowser
How will Saudi Arabia respond to lower oil prices? | Econbrowser.
Oil prices (along with prices of many other commodities) have fallen dramatically since last summer. Some observers are waiting to see if Saudi Arabia responds with significant cutbacks in production. I say, don’t hold your breath.
When oil demand fell in the 1981-82 recession, the Saudis cut production by 6 million barrels a day in an effort to soften the decline in oil prices. They also cut production in response to lower demand in the 2001 recession and the most recent recession. On the other hand, the kingdom boosted production quickly beginning in August 1990 and January 2003 in anticipation of lost production from Iraq in the two Gulf Wars. This historical behavior led many observers to believe that Saudi Arabia would always play the role of a swing producer to stabilize the price of oil.
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Guerilla Gardening in Rural Panama
Guerilla Gardening in Rural Panama.
A gnome (the author) in the Communal Garden
Make no mistake, the war is on. The commodity is food, the source needs to be sustainable, and the community needs to know about it. If you are already into permaculture, or just gaining an interest, then congratulations and welcome to the peace-loving yet active front lines. We call it guerilla gardening.
A few years back, Ron Finley, a native of South Central Los Angeles, got a bee in his bonnet when he noticed his neighborhood was an asphalt desert of fast food restaurants and quick-marts. No wonder the local population was dying young and getting diabetes. Wanting the urbanites around him to have access to healthy food, Ron transformed his yard and curbside with fresh veggies.
The authorities tried to shut him down, but he fought back and won. Now, he has helped create urban gardens all over South Central, and in 2013, he did a ten-minute TED Talk explaining his mission. It’s gotten over tens of thousands of views
