Sunday, November 17, 2013

Industrial Production: Mining

Click to enlarge.

1. Totally sustainable!
2. No malinvestment here!
3. Hyperinflation soon to follow!

It's a sarcastic triple play!


Austrian economists such as Nobel laureate F. A. Hayek advocate the idea that malinvestment occurs due to the combination of fractional reserve banking and artificially low interest rates misleading relative price signals which eventually necessitate a corrective contraction—a boom followed by a bust.

September 23, 2007
Productivity Miracle

If I'm wrong to be a stagflationist, this is the sort of thing that would do me in. It is also something one needs to factor in when hoarding hard assets in general.

Topic: Large mining equipment

I find it all quite humbling. Don't you?

See Also:
Hyperinflation Theories Poned Again

Source Data:
St. Louis Fed: Industrial Production: Mining


Anonymous said...

That is great information--it looks like mining production is peaking just when demand for precious metals is ramping up from the East. If you look at the chart, production declined while the latest PM bull was under construction.

When this bubble bursts, it will be the FED self-destructing, not just tech/real estate/banks. It helps to know there will be a downtrend in supply of what the the PM stocks produce, at the time demand will increase. PM stocks are clearly counter-cyclical to the general equity indexes.

I know you didn't intend the chart that way, but sometimes the best intentions...:)


Stagflationary Mark said...


I look at the chart and see a similar peak at the end of the last great precious metal bull market of the 1970s.

To each his own though. It's not like I expect real interest rates to rise so I won't be making any serious predictions about what may happen next.

I will simply end with this. Where is all that massively increasing mining output going? More empty cities in China?

November 4, 2013
Chinalco says mining boom has decades to run

One of China's top corporate officials has reassured Australian miners the process of urbanisation in the Asian nation has several decades to run and will continue stoking strong demand for minerals.

For what it is worth, I have zero faith in that claim. That's on a scale of 0 to 10 with top corporate officials pegging the bottom of that range. ;)

In any event, i've been bearish since 2004. I have not nor am I bracing for hyperinflation. Time will tell. So far so good though.

Anonymous said...

I see us closer to 1976--but I KNOW NOTHING!!

Thanks for all your commentary and good luck!!

Stagflationary Mark said...


How about gold vs. aluminum?

The latter is certainly very common but it still doesn't come out of the ground for free, and in my opinion is a truly miraculous metal.