We all have some sort of handle on the oxl situation NOW. But why is there no discussion of where resources are heading from here.
Look this world economic implosion has got even the bravest banker running scared. They no longer have the ability to lend with no limit. Credit is being rationed. Given the acute shortage of credit only the best risks are getting financed..this is what the market is saying. look at the prices of mining stocks world wide, they are getting crushed. Why? because most took on too much debt based on extrapolation of cashflows based on speculative commodity hype. Now they are all finding it difficult... rising costs, massive debt falling prices, all add up to one thing, lower sp.
China is falling faster than most realise and wont be the commodity saviour that everyone hopes, the rest of the world is rapidly spiralling towards recession and big ones.
looking at 10 year commodity charts it is clear that they can fall a lot further , most commodities are still double their 03 levels. Since that time there has been massive investment to bring on extra supply that will make it difficult for existing plummeting demand to balance out.
Under the above scenario does even PH make sense? Clearly century does not . The only commodity holding up here is Gold.
Before you write off the Bankers , just put yourself in their position where they are now "credit allocators" rather than "credit writers" and you seen see that it is possible that there are real problems going forward for OZL. RIO has its work cut out also as do many other miners...cold comfort
OZL Price at posting:
$5.50 Sentiment: None Disclosure: Not Held
