Wednesday, December 3, 2008

Metal prices reflect the economy

Only war profiteers may benefit.
http://www.cascadesteel.com/Images/manufacturing_process/01.jpg

Steep declines in the metals market could mean more profits for the arms sellers and other manufacturers in the war machine. It's about the only manufacturing base we have left in this country. Boeing, General Dynamics, etc. etc. are not asking for bailouts.
You don't think they will pass along the savings to customers do you? Only if forced to.

It was only in July that I wrote that Scrap Metal is the New Gold Rush. No more.

~~~~~~~~~~~~~~~~~~~

The price of key industrial metals has fallen further over the last four months than occurred during the worst years of Great Depression between 1929 and 1933, according to research by Barclays Capital.

By Ambrose Evans-Pritchard
Last Updated: 8:50PM GMT 02 Dec 2008

8
Worker at the Chuquicamata copper mine, 1,000 kms north of Santiago, Chile.
Worker at the Chuquicamata copper mine, 1,000 kms north of Santiago, Chile. Photo: AFP

Kevin Norrish, the bank's commodities strategist, said the average fall in the price of copper, lead, and zinc has been roughly 60pc since the peak in July this year. All three metals were traded on the London Metal Exchange in the inter-war years so it is possible to make a comparison.

Prices for the three metals fell 40pc from their highs in 1929 before touching bottom in 1933, with the bulk of the fall in 1930 as the slump spread worldwide. "Lead and zinc have already lost more than they did in the 1930s," he said.

Copper was hit hardest during the Depression, despite the electrification drive in the US and the Soviet Union, falling 70pc at one stage before creeping back in the mid-1930s. The reason was an 85pc fall in US construction, then the biggest user of the metal.

***************************************************

War profiteers may continue to make the big bucks but they are the only ones as George Washington so aptly describes.

~~~~~~

A New War Would NOT Help the Economy

Maybe you've heard it . . . people whispering that we need a good war to rescue our economy.

You know that the hawks are whispering it into Obama and Bush's ears. Someone I've known for years even said it to me the other day.

But would a war really help the economy?

A War Would Devastate What is Left of the Economy

A war would actually devastate what is left of our economy.

Initially, the Iraq war will end up costing at least $3 trillion. That didn't help the economy, did it? We're still in that war, but our economy has tanked.

Moreover, the bailout is costing more (even after adjusting for inflation) than the Marshall Plan, Louisiana Purchase, moonshot, S&L bailout, Korean War, New Deal, Iraq war, Vietnam war, and NASA's lifetime budget combined. We just don't have the money to start another war.

In addition, contrary to popular belief, the reason that WWII stimulated the U.S. economy was not because of America fighting the war. Instead, America producing arms for the British before the U.S. entered the war was the thing which stimluated our economy.

Finally, wars which do not produce a quick victory actually devestate the economy. As a PhD economist explains:

"War always causes recession. Well, if it is a very short war, then it may stimulate the economy in the short-run. But if there is not a quick victory and it drags on, then wars always put the nation waging war into a recession and hurt its economy."

Can America go beat up some poorly-armed country to get a quick war?

Its unlikely. Given that the entire world knows that the U.S. started the Iraq war based on false pretenses, and that the U.S. has tried to expand its empire at the expense of everyone else, even a war against a small, poorly-armed and resource-poor country would be considered a proxy war. Therefore, the other heavily-armed countries would fight the U.S. through local proxies, and the war would drag on.

For all of the above-described regions, a new war would NOT help the economy. It would finish it off.

Source: http://georgewashington2.blogspot.com/2008/12/war-would-not-help-economy.html

No comments:

Post a Comment