Juggling Dynamite

Excellent discussion of a complex topic we all need to continue thinking about as our societies evolve.

Glenn Greenwald was one of the first reporters to see — and write about — the Edward Snowden files, with their revelations about the United States’ extensive surveillance of private citizens. In this searing talk, Greenwald makes the case for why you need to care about privacy, even if you’re “not doing anything you need to hide.” Here is a direct video link.

Mark Twain famously quipped that a miner was a liar standing beside a hole in the ground.

In practice this has not been so far from truth. A good many producers were over-promising margins the past few years by under-reporting break even costs–not using full cost accounting. As the price of metals continue to plunge, projects and producers have been burning cash at a voracious rate. Equipment, inventory and companies will need to be liquidated to pay creditors. Ironically, the metal proponents who assured the world that cash was trash, are now increasingly desperate to raise it.

Bloomberg reports on dropping gold prices and what that means for production. Here is a direct video link.

As the price of oil declines, its probably safe to say that many oil producers have also been under-reporting their costs and are burning through cash faster than currently believed…

Today the Canadian dollar index (CDW) has broken to a low last seen in November of 2008 when the great financial crisis was humbling bankers and halving global asset prices. This time around, stock markets have barely begun to decline and the Canadian housing market remains outrageously over-valued with household debt (and Canadian bank shares) at all time highs.  With all that yet to unwind, rational minds should ponder,  how low could the loonie go this time?

The below portrait since 1975 reminds that cyclical declines in the C$ have averaged 27% and lasted about a decade.  In this case, the decline that began from 107 on a weekly close in November 2007, was temporarily interrupted by QE-mania from March 2009 to May 2011, and then resumed its descent with global demand.  Not sure then, if we should count this as year 7 of the declining loonie trend, or year 4. But in either case, it seems we have considerably further to go both in likely duration and depth for this cyclical decline.