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« Gissen & Berol: Investing for the New “Long Term” | Main | Carmel Daniele: This Fantastic Crisis »

Green Shoots or Greater Depression?

In this mornings mail bag we have this take on the current state of the economy by Bud Conrad/David Galland, Editors, The Casey Report which we hope that you enjoy.

While we aren’t contrarian for the sake of being contrary, more often than not that is the position in which we find ourselves. Today, with the media falling all over itself to paint a rosy outlook for the economy while simultaneously voicing encouragement to the new administration in its remake of the nation in previously unimaginable ways, it’s hard not to question our conviction that the worst is yet to come (read more…)

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Reader Comments (1)

Good morning everyone.

This piece is very timely as I have been reading some other stuff that points to the fact that all is not well.

There was a link in yesterdays OilDrum Drumbeat:

If you go through the graph on this link you will see that the current situation is really very dire.

The basic problem is that the consumer has leveraged themselves up to the max this past 20+ years and now has to pay down the debt before they commit to spending again. Since its such an extraordinary amount this will take the best part of the next decade...

In the meantime to prevent TEOTWAWNI, global governments have basically done some CPR and got the patients heart going again.

In so doing they have socialised a huge amount of bank loss debt and also committed to massive debt a the governmental level -in effect governments are now in hock as much as consumers where pre-crash.

How does this relate to Uranium?

Well, the reason I started learning about Uranium was because I thought it would be a good post-Peak Oil requirement to buildout Nukes. This may still be the case, but what we have seen happen is that demand has collapsed and with it the need for electricity to power industry. In other words without cheap energy the consumer consumes less and in turn power demand evaporates in a declining series of recession/depressions.

Expensive energy > Demand destruction > spare capacity > no need for Nukes (since gas is cheap and plentiful).

Now, until we reach a stage where gas supply also falls faster than demand falls I now don't see such a major need to buildout Nukes.

Of course China is planning to keep the wheels of Industry churning and so is planning assembly-line reactor build-out (Is it the Westinghouse ATP1000?) -probably one every month by the end of the next decade...

This will push Uranium demand up but its a much more complicated picture than it was for me 18 months ago...

In general prices look frothy, Chinese demand might be a mirage and not even huge housing start rises move the market so I have reduced my stock holdings a bit selling anything that looks vulnarable, have cash and kept defensives. Gold might be OK if there is another sell-off / bout of panic.

Best of Luck, Nick.

August 27, 2009 | Unregistered CommenterNick

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