Foster Stockbroking updated report, page-3

I do not know why Fosters said this.   Their history is that their estimates are high and I believe these are as well.   First NdPr fell rapidly from March to June.   It continues to fall  at a slower rate.   Both Nd and PR have fallen in the last 10 days again.    (https://price.metal.com/Rare-Earth ) Other than China severely limiting production   or stock piling I do not see any short term pickup in price.    I also think the economy is going to see a major correction possibly a recession.    The world economies are still growing but much slower than a year ago.   The US is growing the fastest because of the Trump tax cuts but even it is slowing.     Many of the markets PMs are sold into are sensitive to the economy.    Autos appliances tools.   There are others that are not as sensitive like medical equipment and military.  

The Economist in their October 13 issue.  Titled “The next Recession” featured  this subject. Just a few of the many points they made.   Central banks have not taken the steps nesasarly to be able to help with another correction or recession.   The most powerful tool they have is to reduce interest rates.   Typically Interest rates have been above 5% when a correction starts.   Lowering to 1 or 2% is a powerful tool for stimulus.   None of the central banks have raised rates that much.   US has highest rate.  It is currently just under 2% It was over 5% in 2008.   England’s central bank is next highest 0.75% today, 5.75% 2008.  Next is the EU.  Just a little over 0% today,  just over 4% 2008.   Japan is also near Zero it was 0.5% in 2008.    All this data is on page 7 of the special report.  Notice that Japan still has not fully recovered from the banking crisis.   There is a lot more in the report  as well.  Lower interest rates can not help,  even 0% is not much of a change.     Next most powerful tool is tax cuts.   Many governments have kept their  foot on the gas and have run up debt.   Running up further debt has many problems.   Last is QE.  Usually by central banks printing money to buy government bounds.  The US fed is the only one of those mentioned above to unwind any of  the QE from 2008, it has only unwound a little.  EU and London are still applying a little QE.   Like tax cuts this printing of money has its own problems.   See articles,  I am not going to try and explain it.  If we go into a correction it could accelerate very quickly because most of the normal tools to stimulate are not available now.   This will depress both NdPr prices and stock markets in general.    Lynas is a aggressive  growth stock,  these are always hit hard in any type of correction or recession.   This with Nd and PR prices will be a double whammy on Lynas. 

There are many that have been  calling for a correction for years,  there always are.  The economist has been published since 1848.   Many of its contributors have won the Nobel prize in economics.   It is published weekly in dozens of languages.      It talks about global problems.  It has saved me large loses because in reading it I can see problems for the Market before they happen. 

 

You can obtain a PDF of the report at https://shop.economist.com/products/special-report-on-the-world-economy  If you do not have a subscription it is USD 10.00,    in  the US. 

Subscriptions are USD $159 to $300 depending where you live.    There are ways to get a good discount.    Start with a 90 day trial subscription for $15.00, available in US, no idea where else. 

The articles from 2007 and 2008 are still available.  These helped my portfolio tremendously then.  They would not help any one today except to understand Encomiast  history  of pointing out problems and what they said that was right and wrong.    Do not be surprised if different feature articles disagree.  They work hard to present a complete picture.