Could This Be the Next Bakken?

Posted on September 13, 2013 by MN Gordon

Could This Be the Next Bakken?
By Marin Katusa, Chief Energy Investment Strategist

Everyone is looking to make the “Big Score” in the resource sector—that one special discovery that is not just elephant- but brontosaurus-size: big enough to put you into the annals of resource exploration and make fortunes for your investors.

Everyone knows that investing in the junior resource sector can be dangerous.  In fact, there are few investments where the odds are so high that they will fail and you will lose your money.

But when you do find the “Big Score,” it can be a life-altering experience.

There’s actually a book with that title, The Big Score.  It’s a book about Doug Casey’s good friend and Casey Explorers’ League Honoree, Robert Friedland, and it details the legendary Voisey’s Bay nickel discovery.  If you can get your hands on it, I recommend you read it.

Robert’s company, Diamond Fields, was exploring for diamonds in Africa. Continue reading →

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The Economic Recovery that Never Was

Posted on September 10, 2013 by MN Gordon

“There are three kinds of lies,” observed Mark Twain.  “Lies, damned lies, and statistics.”  Perhaps Twain had government economic reports in mind when he made his famous quip.

For example, a quick glance at the headline unemployment numbers published Friday show things are moving in the right direction.  The unemployment rate in August dropped to 7.3 percent…all the way from 7.4 percent in July.  Not bad.

But, unfortunately, when you scratch below the surface of the Labor Department report a gigantic omission comes into view.  In particular, the increasing part of the working age population that has been disappeared from the labor force because they’ve stopped looking for jobs.  Just in August alone, 516,000 American workers were dropped out of the labor force, which bumps up the total number of working age Americans who are not in the labor force to almost 90.5 million.

By subtracting discouraged workers out of the numerator in the unemployment rate equation, the Labor Department can show a decline in the unemployment rate.  Obviously, that’s the goal of a government statistician. Continue reading →

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Death of the Consumer and Other Miracles

Posted on September 6, 2013 by MN Gordon

Something peculiar is going on.  One data point says the economy’s improving.  Another says it’s floundering.

Nonetheless, we strive to connect the dots and draw inferences as we go.  For example, according to data released Tuesday, manufacturing and construction spending is on the rise…

“Stronger-than-expected data on U.S. manufacturing and construction spending on Tuesday hinted the world’s biggest economy was gaining traction,” reported Reuters.

“The U.S. manufacturing sector grew last month at its fastest pace in more than two years, with the Institute for Supply Management’s (ISM) index of national factory activity rising to 55.7 in August from 55.4 the prior month.

“That comfortably beat expectations for 54, with the index at its highest since June 2011.

“A reading above 50 indicates expansion in the sector.”

What’s not to like about that? Continue reading →

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Secrets of the September Swoon

Posted on September 3, 2013 by MN Gordon

Federal workers, and many other fine folks, celebrated Labor Day yesterday by partaking in lethargy.  Here at the Economic Prism we did nothing of the sort.  Rather, we continued our labors for fun and for free…and always on your behalf.

With August now behind us, and September now in front of us, there’s much to be garnered looking back to the future.  Gazing back through the rear view mirror we see a stock market that appears to have crested.  In fact, both the DOW and the S&P 500 closed out August with their worst months since May 2012.

Is the market just taking a pause, to collect its breath, before its next leg up?  Or is it rolling over for a big bear market slide down?  Only time will tell what to make of it.

In the meantime, your broker may tell you to ‘buy the dip.’  A technical trader will look at his lines of resistance and say the bull market’s still intact.  Permabears will point to the August decline as evidence the market will crash 50 percent – or more – any day now.  Of course, no one really knows for sure. Continue reading →

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