BHP Biliton/The Global Economy, Peter Schiff/'Carts and Horses', 'Flations'

BHP Billiton/The  Global Economy, Peter Schiff/ 'Carts and Horses', 'Flations'

BHP Billiton on the  Global Economy

An article yesterday titled '3 Reasons Why The World's Biggest Miner (BHP Billiton) Is Worried About The Global Economy' shows three charts on (respectively) austerity (i.e. Eurozone government expenditures/revenues - I say 'shocking'), debt levels (U.S. borrowing by sector - broadly known but I think worth your time to review and think about), and near-term slowing of China's economy (Money Supply (M1) and credit growth - very interesting).  Those with their 'feet in the mud' (people who actually operate businesses and whose 'jobs are on the line') in my view are people to be listened to and whose views ought to be considered carefully.  I suggest you review these three charts carefully - review time 2 minutes.

I strongly suggest (for the same 'feet in the mud' reason) that you take the time to read 'BHP Sounds The Alarm On Global Growth and Commodity Prices' excerpted from BHP Billiton's recent mid-year report - reading time - 3 minutes.

Peter Schiff on 'Carts and Horses'

Well-known author and would-be politician (currently running for a U.S. Senate Seat in New York State) Peter Schiff wrote an article in Seeking Alpha yesterday titled 'Robert Reich, Carts and Horses'.  Mr. Reich is a former U.S. Labor Secretary who currently teaches at a California University.  I commented on Mr. Schiff's article this morning as follows:

Although Mr. Schiff does not explicitly say that the U.S. Government ought not to take on additional debt to promote spending by those 'not rich', I think from this article that is his position. If it is, I agree with him. I do, however, think it unlikely people struggling to sustain their lifestyles as best they can are going to be able to save in a meaningful way. I also question whether 'the rich' will want to invest 'new capital' in a high politicized environment that seems to face ever increasing regulation and 'socialist' attitudes - all of which makes earning an adequate risk/reward return on capital increasingly unlikely. Finally, I agree intellectually with the conclusion Mr. Schiff reaches in what I am sure is a 'well-intentioned' way that:

"rather than encouraging the country to spend itself deeper into debt, he (Mr. Reich) should call for greater savings so that we have the means to invest in new businesses and new industries. That is the true road back to solvency, but it will only work if we have less government spending, fewer regulations, lower taxes (particularly on those with the highest propensity to save and invest), and higher interest rates".

That said, unfortunately as a practical matter I see this statement as 'pie in the sky' in what I for one see today as a very 'backed into a corner' parochial and politically polarized America.

Interestingly, in the face of what I think is Peter Schiff's very positive popularity with a great number of 'glass half empty' thinkers, my comment so far as received 11 positive 'thumbs-ups' and only 1 negative 'thumbs-down.  Frankly, I was expecting that voting relationship to be reversed.

If I am right things are unlikely to be 'economically the same' for the U.S. (or for Canada and other developed countries, in varying degrees) in the future as they have been in the recent past.  Because of the importance of the issues raised in this article, if you invest in Resources or other equities I suggest you read it - reading time 4 minutes - and reach your own conclusions.

'Flations'

I bring your attention to a Seeking Alpha article published today titled 'The 'Flations - Part II', and suggest you take the time to read it - reading time 8 minutes.

My Watched Stocks Portfolio - Today's Featured StockResearchPortal.com Data Component

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Linkedin Mining and Oil & Gas Stocks Groups

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If you are an Employee of, or Investor Relations Consultant to, a Mining or Oil & Gas Company consider joining the applicable Linkedin Group by clicking on one of the following images.

                   
       
                    

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Best Regards,

Ian R. Campbell

President

StockResearchPortal.com

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