Monthly Metal Review
- May 2019
- April 2019
- March 2019
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
The second EU bailout of Greece was done, with drama, producing relative economic calm in February compared to the tumultuous months preceding it. Political controversy surrounds Europe's fiscal treaty proposal and Ireland’s prime minister has called for a referendum on it. Still, the region's cred-it woes continue while Greeks protest harsh austerity measures engineered by Northern countries.
February began with news that 16.5-million people in the 17-nation EU, 10.4 percent, were unemployed. Joblessness was 23 percent in Spain and 20 in Greece. Germany had 6.7 percent. Almost one in two Spaniards and Greeks 16 to 24 cannot find work.
Meanwhile, the U.S. seems to be on the path to economic recovery with employment growing by nearly 2 million since the summer.
The Middle East bubbles, Iran and Israel bluster and in Syria civil war takes shape. Equities are robust and gold, not unexpectedly, is up, coinciding with U.S. economic-recovery news.
Economic growth in India slowed from an annualized 6.9 percent to 6.1 percent over the last quarter of 2011, due to a fall in corporate investments as well as in exports despite a weakened currency.
With a slowing economy, China loosened bank rules and eased credit to encourage growth. Tough capital rules meant to fight inflation have been softened to relax reserve-capital requirements and allow longer grace periods. Commodities rose after the People’s Bank cut major lender's reserve-requirement ratios, the cash banks must have in reserve, by 50 basis points to spur lending and liquidity. China’s economy grew more than 9 percent in 2011. Economists forecast slower growth, to perhaps 8 percent.
A World Bank report said China could face an economic crisis unless it reforms its system of state-owned enterprises to make them operate more like commercial firms. Done with a Chinese government think tank, the report says growth could decelerate rapidly and spread, deepening problems in banking and elsewhere. It urged Beijing to overhaul local government finances and promote competition and entrepreneurship.
Last year was the worst in a decade for many commodities hedge funds. The average commodities fund fell 1.7 percent; down from a 2010 rise of 10.7, according to the Newedge index. Giants like Blen-heim, BlueGold, Clive Capital and Merchant reported double-digit year losses. The Reuters-Jefferies CRB index fell 8.3 percent, pulled down by lower metals and ag rawmaterials prices. Still, some metals specialists had strong returns, profiting from bearish positions on copper.
In early February, a study submitted to South Africa’s ruling African National Congress (ANC) buried the mine nationalization project. South African congressmen have long wished to cap a larger part of the country’s mineral resources, which Citigroup valued at USD 2.5 trillion in 2010. President Jacob Zuma finally rejected the nationalization project which, according to that study, would have cost around US$130 billion, an amount equivalent to South Africa’s annual budget. Instead, the govern-ment is more prone on adopting the study’s proposal to set a 50-percent capital gains tax on the sale of South African minerals.