Richard (Rick) Mills
Ahead of the Herd
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As a general rule, the most successful man in life is the man who has the best information
Many, many years ago during a lengthy argument with a friend he told me to ‘give it a doubt’ – he meant I was wrong.
The herd is convinced the commodities boom is over. Doom and gloom, the sky is falling, the bears argument sounds convincing - growth has stopped, economies are slowing. Looking at the TSX.V’s performance (most of the world’s mineral exploration firms call the Venture Exchange home) it’s as if people are convinced the need to search for, develop and mine new mineral deposits is over.
According to Bloomberg the U.S. economy may cool to a 1.6 percent pace in the second quarter, after growing at a 2.5 percent rate in the first three months of 2013.
U.S. industrial production fell by the most in eight months - a gauge of factories in the New York area fell to minus 1.4 this month from 3.1 in April.
“The drop in factory output, which accounts for more than 70 percent of industrial production, was broad-based and in keeping with data earlier this month that showed factory payrolls failed to expand last month.
Industrial capacity utilization, a measure of how fully the nation's mines, factories and utilities are deploying their resources, dropped sharply from a more than 4-1/2 year high.” Reuters,Factory, wholesale price data flag economy's woes
Manufacturing has been hit hard by the $85 billion in across the board spending cuts – the ‘fiscal cliff’ that started in March. U.S. GDP growth is predicted at 1.9 percent for 2013.
There’s a record six quarter recession in Europe, GDP growth there is expected to contract by 0.1 percent, GDP growth for Japan is predicted at 0.8 percent for 2013.
Sounds ominous,it’s obviousthe commodities boom has gone bust and economic growth has disappeared.
Give it a doubt.
In the Latin American and Caribbean region 2013 GDP growth is predicted at 3.5 percent, in the East Asian and Pacific region growth is predicted at 7.9 percent. China’s GDP growth outlook for 2013 is 8.6 percent while India’s outlook clocks in at 6.1 percent.
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