Daily Digest

Daily Digest - April 11

Sunday, April 11, 2010, 10:58 AM
  • Mauldin: Reform We Can Believe In
  • Bank of International Settlements' Tough Assessments Don't Bode Well for World Economy
  • China And The Yuan: What's At Stake
  • Economy In Tatters, Kyrgyzstan Awaits Russian Aid
  • Alaska Predicts Higher Oil Price But Lower Output
  • Ivanhoe to Start Building Mongolia Copper, Gold Mine

Economy

Mauldin: Reform We Can Believe In (JRB)

Casey Stengel, manager of the hapless 1962 New York Mets, once famously asked, after an especially dismal outing, "Can't anybody here play this game?" This week I ask, after months of worse than no progress, "Can't anybody here even spell financial reform, let alone get it done?"

Bank of International Settlements' Tough Assessments Don't Bode Well for World Economy (bc0203)

In a new report, the Bank for International Settlements (BIS) - often called the "central banks' central bank" - points out that bond investors are not as smart as they think, that Western debt is much higher than officially reported (since contingent liabilities and pension debts are excluded from official numbers), and that the recovery of the world economy may be crushed by fiscal problems.

China and the yuan: What's at stake (Nickbert)

The agreement is widely expected to result in an immediate 2% to 3% rise in the yuan -- a fairly modest step. What could make the agreement significant, however, is if China agrees to future increases as the currency moves toward being freely traded for the first time.

Economy in tatters, Kyrgyzstan Awaits Russian Aid (Nickbert)

Kyrgyzstan's new leaders on Friday froze the national banking system, saying deposed President Kurmanbek Bakiyev had pillaged the state coffers before fleeing the capital amid riots that left dozens dead and thousands injured.

Energy

Alaska Predicts Higher Oil Price But Lower Output (Nickbert)

The department's spring forecast predicts that North Slope crude prices will average $75.32 per barrel in fiscal 2010, which ends June 30, and rise to an average $77.65 per barrel in fiscal 2011. But fiscal 2010 production will be 6.9 percent lower than that achieved in the previous fiscal year, averaging 650,000 barrels per day, according to the forecast. Production in fiscal 2011 will drop another 4.8 percent to 619,000 barrels per day, according to the forecast."

Environment

Ivanhoe to Start Building Mongolia Copper, Gold Mine

Ivanhoe Mines Ltd. said construction of a $5.5 billion copper and gold mine that it’s developing in Mongolia is set to begin. Oyu Tolgoi is the world’s largest untapped copper and gold deposit, holding as much as 81 billion pounds of copper resources and 46 million ounces of gold resources, Ivanhoe said on its Web site.

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8 Comments

CB's picture
CB
Status: Gold Member (Offline)
Joined: Mar 18 2008
Posts: 365
Re: Daily Digest - April 11

Besides hosting US and Russian bases Kyrgyzstan has some other natural resources...

Unrest may affect Kyrgyzstan gold production:

http://uk.reuters.com/article/idUKWLB199020100408?pageNumber=2&virtualBr...

Quote:

The Soviet Union's largest gold mine was located at Makmal in Kyrgyzstan, and in the Soviet period Kyrgyzstan's 170 proven deposits put it in third place behind only Russia and Uzbekistan in gold production in the union. Two more promising deposits, at Kumtor and Jerui, have been discovered. Kumtor, said to be the seventh-largest gold deposit in the world with an estimated value of US$5.5 billion, is being explored by the Canadian Metals Company (Cameco), a uranium company, in a joint-venture operation. Gold deposits are concentrated in Talas Province in north-central Kyrgyzstan, where as much as 200 tons may exist; deposits in Makmal are estimated at sixty tons. Deposits adjacent to the Chatkal River in the northwest amount to an estimated 150 tons.

The terms of the agreement for Kumtor exploitation with Cameco, which gains one-third of profits from gold extraction, caused public concern in 1992. To improve control of the mineral-extraction and refining processes, and to address the uncontrolled movement of precious metals out of the country, President Akayev created a new administrative agency, Kyrgyzaltyn (Kyrgyzstan Gold), to replace Yuzhpolmetal, the Soviet-era body responsible for precious metals. In January 1993, Akayev also brought the country's antimony and mercury mines into Kyrgyzaltyn. The latter are especially important because mercury is used to refine gold. Control of the mercury mines makes more likely the realization of Akayev's hope that Kyrgyzstan will become more than just a supplier of raw materials.

Although Kyrgyzstan has one of the largest proven gold reserves in the world, in the early 1990s fuel and spare parts shortages combined with political disputes to hamper output (see Government and Politics, this ch.). Production in 1994 was 3.5 tons, but the output goal for 1996 was ten tons.

http://www.country-studies.com/kyrgyzstan/natural-resources.html

Some commentary on the situation and the aftermath of the violence:

http://www.registan.net/index.php/2010/04/08/what-we-talk-about-when-we-talk-about-revolution/

The president is so far refusing to step aside, remaining holed up in the south, and is being accused of looting the treasury in the days leading up to the violent unrest. The US government has so far remained silent on its position about the shift in power and may be continuing to work with the deposed president behind the scene.

While these recent events in far away countries (Thailand, Kyrgyzstan, Poland, Sudan, Greece, etc) are nominally unrelated I think that the general malaise affecting the world economy is likely to continue to put continuing pressure on governments and populations and make additional problems more likely. The more that occur the more likely that one will lead to a cascade that will significantly affect a larger region and/or involve the governments of the larger world economies. I see the likelyhood of a 'black swan' increasing as we go forward.

smirking pig's picture
smirking pig
Status: Bronze Member (Offline)
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Posts: 26
Re: Daily Digest - April 11

if this is already posted......forgive me.

 

I think it needs to be reposted.

 

as this is to Chris posting to the end of cheep oil...

 

#

smirking pig's picture
smirking pig
Status: Bronze Member (Offline)
Joined: Sep 26 2009
Posts: 26
Re: Daily Digest - April 11

The Crash Course

 

http://www.peakprosperity.com/crashcourse

watch it please.

 

paladin

Will's picture
Will
Status: Bronze Member (Offline)
Joined: Oct 27 2008
Posts: 81
Re: Daily Digest - April 11
smirking pig wrote:

if this is already posted......forgive me.

 

I think it needs to be reposted.

 

as this is to Chris posting to the end of cheep oil...

 

 

 

#

 

If this has been posted, I haven't seen it.  Thanks.  Add Jeff Rubin to the list of allies with Dr M.  Nothing much new here, simply another perspective on the same topic of the impacts of running out of conventional cheap oil and the opportunity to revive local economies and create domestic jobs during and beyond the transition.  I highly recommend watching and sharing with others.

rhare's picture
rhare
Status: Diamond Member (Offline)
Joined: Mar 30 2009
Posts: 1326
Re: Daily Digest - April 11
smirking pig wrote:

First half was great, but then the second half started into the cap-n-trade global warming crap (IMNSHO).  He goes on about how the natural markets are going to reduce carbon emmisions to we need to have regulation, particularly since the developed world is not going to be the main emmiters. Then he totally misses the boat when he starts saying we will have tariffs to force the rest of the world to play by arbitrary rules.  Totally misses the point that we can't enforce any tariffs since we are broke, and will shortly have no influence as the dollar falls even though he talks about it.  Why have cap-n-trade when the Chinese will just ignore it, and we will have no manufacturing, so it won't matter.  I guess he just thinks we need to feed the government or some internationial organization what little wealth we will still have.

Seems like he is a blend of Peter Schiff, Chris Martenson, and The DamnTheMatrix.  Just doens't work! SmileThe last question even covers all this.  I kind of like it, just seems that he has good economic sense combined with a environmental desire that has no chance of working, but will result in more econmic misery in the US.

 

plato1965's picture
plato1965
Status: Platinum Member (Offline)
Joined: Feb 18 2009
Posts: 615
Re: Daily Digest - April 11

 

US military warns oil output may dip causing massive shortages by 2015

• Shortfall could reach 10m barrels a day, report says
• Cost of crude oil is predicted to top $100 a barrel

 http://www.guardian.co.uk/business/2010/apr/11/peak-oil-production-supply

mesaboogieman's picture
mesaboogieman
Status: Bronze Member (Offline)
Joined: Jan 16 2009
Posts: 42
Re: Daily Digest - April 11

The financial bubble in China will almost certainly collapse before then, resulting in lower demand and lower oil prices as in '08, then gradual increase in demand will cause it to rise again, etc etc  It'll be a bumpy ride.  I'm aiming to have solar PV and an electric car by then Smile

plato1965 wrote:

 

US military warns oil output may dip causing massive shortages by 2015

• Shortfall could reach 10m barrels a day, report says
• Cost of crude oil is predicted to top $100 a barrel

 http://www.guardian.co.uk/business/2010/apr/11/peak-oil-production-supply

britinbe's picture
britinbe
Status: Gold Member (Offline)
Joined: Dec 28 2008
Posts: 381
Re: Daily Digest - April 11
mesaboogieman wrote:

The financial bubble in China will almost certainly collapse before then, resulting in lower demand and lower oil prices as in '08, then gradual increase in demand will cause it to rise again, etc etc  It'll be a bumpy ride.  I'm aiming to have solar PV and an electric car by then Smile

plato1965 wrote:

 

US military warns oil output may dip causing massive shortages by 2015

• Shortfall could reach 10m barrels a day, report says
• Cost of crude oil is predicted to top $100 a barrel

 http://www.guardian.co.uk/business/2010/apr/11/peak-oil-production-supply

do you think so?

Looks more like a bit of "conditioning" to me for any future actions.  I wouldn't be surprised if war was put on the agenda to "preserve the Americian way of life" at some point in the future.  I sincerely hop I am wrong though.................

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