Are you getting as worried about the economy as me and my broker? If you’re one of those who believes ‘the glass is half full, not half empty’, you could say it’s a great time to borrow money. But if interest rates fall any further, the banks will start charging us a storage fee on our savings.
For a long time, the headlines were all about the price of oil. It’s now barely one third of where it was just over a year ago. Thousands of people have been laid off in Alberta and elsewhere, and things are not likely to turn around soon.
The prices of almost every other commodity in the world have fallen sharply as well. Gold is now trading for less than $1,000 an ounce. Major mining companies like Barrick are closing mines or selling them off, resulting in more job losses.
Two commodities that have remained remarkably strong are aluminum and uranium. Saskatchewan is one of the world’s largest producers of uranium. It is used to generate much of the electricity in places like France and Germany. With all resource commodities, there will inevitably be efforts to ‘manipulate’ the price rather than leaving it strictly to the free market. We’re told that the price of oil is depressed because the Saudis are refusing to cut production. OPEC is no longer an effective international cartel.
There never really has been such a cartel controlling uranium. The world price fell last year, and analysts say the current strength may reflect nothing more than a build up of demand.
Adding to the economic uncertainty for Canada is the collapse of talks on the proposed Trans Pacific Partnership. Stephen Harper was hoping that it might all come together before the election call, but no such luck.
With all this going on, does anyone really care if we are indeed in a recession? Whatever word you use, if you don’t have a job, it’s hard to think about the future.
I’m Roger Currie
