I am
seeing a flurry of stories that base metals miners are rushing to shut
down. Just look at some of the headlines from the past couple days:brbra style=font-family: verdana; href=http://www.mineweb.net/mineweb/view/mineweb/en/page36?oid=73829sn=DetailZambian copper workers face layoffs/a … a style=font-family: verdana; href=http://www.mineweb.net/mineweb/view/mineweb/en/page72102?oid=73815amp;sn=DetailIndefinite shutdown for world top /aa style=font-family: verdana; href=http://www.mineweb.net/mineweb/view/mineweb/en/page72102?oid=73815amp;sn=Detailtantalum miner/a … a href=http://www.mineweb.net/mineweb/view/mineweb/en/page504?oid=73832amp;sn=DetailMwana Africa shuts Zimbabwe nickel mines/a … a style=font-family: verdana; class=SmallGrayLink title=http://www.resourceinvestor.com/pebble.asp?relid=48281 href=http://www.resourceinvestor.com/pebble.asp?relid=48281Denison Mines delays uranium project/a … a style=font-family: verdana; href=http://www.theaustralian.news.com.au/business/story/0,28124,24703432-5005200,00.htmlNorilsk Idles Two Mines/a
… I could go on, but you get the picture. This is happening because
the global economy is tumbling into recession (See the China story
linked below). But down the road, this is also setting up a supply
squeeze and subsequent rebound.brbrAnd it’s not just base metals: a href=http://www.miningweekly.com/article.php?a_id=148236 target=_blankAustralia’s 2008 gold output may fall to lowest level since ‘89 /a.brbrIn Other News …brbra href=http://network.nationalpost.com/np/blogs/tradingdesk/archive/2008/11/25/gold-equities-expected-to-pay-off-for-the-patient.aspxGold equities expected to pay off for the patient /ablockquotep style=font-family: verdana;Scotia
Capital analyst Trevor Turnbull remains bullish on gold, noting that
dollar demand for the metal reached an all-time quarterly record of
US$32-billion in the third quarter as investors flocked to safety. He
also highlighted the identifiable investment demand gold offers, which
includes ETFs, bars and coins./p/blockquoteXX Sean’s note — this guy’s picks will look familiar to buyers of my gold report. By the way, did you get yesterday’s update to Your Golden Parachute for 2009? It’s an important one!p style=font-family: verdana;a href=http://c.moreover.com/click/here.pl?x1707707489amp;f=1774 target=_blank Gold is the answer. Now what was the question? /aWhile
gold has hardly been seen to be performing well in recent months, and
has failed to meet gold optimists’ more extreme, or even more mild,
expectations, it has still performed less badly than most other sectors
of the market. As has been noted here on several occasions actual
physical demand has remained extremely strong, both in eastern and
western markets. Major gold suppliers have run out of inventory and
seem to be having difficulty replacing it, while ETF demand remains
very positive./pa href=http://www.econbrowser.com/archives/2008/11/synchronized_re.htmlSynchronized Recession, Synchronized Stimulus?/ablockquoteIf
all the countries (or all the relevant countries) were to stimulate
simultaneously, then the aggregate world economy would look a lot more
like a closed economy, and the multiplier would be larger yet again./blockquotea onblur=try {parent.deselectBloggerImageGracefully();} catch(e) {} href=http://4.bp.blogspot.com/_32fNCLoKS7g/SS1ArWGf34I/AAAAAAAACd0/Ni0ymVgN1ao/s1600-h/global+growth.gif/ap style=font-family: verdana;strongimg alt= style=width: 480px; src=http://local.content.compendiumblog.com/uploads/user/7e88b461-578b-47f3-88ec-038e212ad053/aa0ff38d-9bb9-44a5-bba5-8be30d8f6977/global%20growth.gifFigure 1:/strong From a href=http://manyeyes.alphaworks.ibm.com/manyeyes/visualizations/oecd-economic-outlook-gdp-growth-forvisualization/a of OECD emEconomic Outlook/em 84 a href=http://www.oecd.org/document/18/0,3343,en_2649_34109_20347538_1_1_1_37443,00.html[link]/a.
Blue is negative growth, darkest blue is -9.335%; orange is positive
growth, most orange is +9.335%. White is zero; gray is no forecast. /pp style=font-family: verdana;a href=http://www.nytimes.com/2008/11/26/business/worldbusiness/26chinasteel.html?_r=1amp;ref=businessA Global Downturn Puts the Brakes on China’s Industry /aIt
is happening faster than most anyone predicted: China’s economy, long
the world’s fastest-growing major economy, is slowing down. Economists
are forecasting that after growing nearly 12 percent last year, China’s
economy could slow to 5.5 percent in the fourth quarter of this year —
a stunning retreat for a country accustomed to boom times.br/pp style=font-family: verdana;a href=http://www.nakedcapitalism.com/2008/11/western-financial-system-we-knew-has.htmlThe Western Financial System We Knew Has Collapsed/a/pblockquote style=font-family: verdana;Getting
banks to lend again is even more essential than getting primary and
secondary markets for illiquid structured financial products going
again. It may be even more important than getting the regular
commercial paper market going again, important though that is. Small
and medium enterprises rely overwhelmingly on banks for external
finance. Without access to bank loans, credit lines and overdraft
facilities, countless SMEs that would be perfectly viable with a
functional financial and banking system are threatened with bankruptcy.
Without working capital, businesses go out of business. Banks are
essential. But they are not lending. Why? A number of possible
explanations suggest themselves./blockquotep style=font-family: verdana; face=verdanaAnd now for some good news …/pp style=font-family: verdana; face=verdanaa href=http://www.bloomberg.com/apps/news?pid=20601087amp;sid=auvAhFArbMZoU.S. Mortgage Rates Fall on $600 Billion Fed Plan /aU.S.
mortgage rates fell more than three-quarters of a percentage point
today … The average U.S. rate for a 30-year fixed mortgage ended the
day at about 5.5 percent after falling to as low as 5.25 percent,
according to Bankrate Inc. It was 6.38 percent this morning./pXX Sean’s note –
I’ll be traveling for Thanksgiving, so my computer access over the long
weekend will be very restricted. Have a great holiday, stuff yourself
silly, and I’ll talk to you on Monday.

Last 5 posts by Sean Brodrick

• The Golden Phoenix - February 25th, 2009
• Blessing in Disguise - February 4th, 2009
• What I'm Reading Today - January 7th, 2009
• Gold and Oil Short-Term Trends - January 7th, 2009
• Is Gold Poised for a Pullback? - January 6th, 2009