By Chris Berry (@cberry1)
For a PDF version of this note, please click here.
By the time you read this, I’ll be in London attending Mines and Money as a speaker and hosting a roundtable on Energy Metals. I think it’s fitting that I’ll be in the city which was at the heart of the last Great Game, the name for the geopolitical and strategic rivalry between the British and Russian empires in the 19th century. After last week’s events in the financial markets, it appears that a new Great Game has begun. The carnage last week made two issues abundantly clear.
First, OPEC has thrown down the gauntlet and is serious about asserting its dominance in the global oil markets.
In July 2008, then Treasury Secretary Henry Paulson touched off the greatest banking crisis of our generation stretching back to the 1930’s. On Sunday, July 20th 2008 before the markets opened in Asia, the Treasury Secretary of the United States stepped in to guarantee the US bond portfolio owned by China. Earlier that same day he had commented on national TV,
“I think it's going to be months that we're working our way through this period, clearly months. Of course the list [of difficulties] is going to grow longer given the stresses we have in the marketplace, given the housing correction - but again, it's a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation.”
We have now spent 72 months - or 6 years - in the economic malaise that followed the US housing bubble’s implosion.
