Gerard Minack on the capex cliff

Who said the universe was a wasteland of indifference? Yesterday, after reading the Morgan Stanley report on the capex cliff  I opined for the return of Gerard Minack. Today, poof, from out of the ether comes Mr Minack’s take on the capex cliff titled The Carnival is Over. The universe cares about MB readers, apparently…

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Australia faces the end of a once-in-a-century commodity boom. The outlook is for lower (non-mining) growth, weak income growth, and pressure on public finances. For investors this points to a still-lower A$, under-performance of Australian equities, and a structurally lower policy rate.

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Comments

  1. Thank goodness, some real research – unencumbered by the eternal sales pitch, with proverbial Oliver screaming “BUY, BUY, BUY…”

  2. With iron ore in the Pilbara having about a 50 year resource life we could be in a change of state to scarce resources.

    The Limits to Growth suggested substantial resource depletion by about 2050.

    A recent review suggested we are on the path forecast by TLTG.

    Grantham (from memory) opined recently that resource scarcity was undergoing a fundamental change.

    While the current/recent boom might indeed have ben a boom/bubble, there are good reasons to expect that the pricing of the high availability period of the next few will not be lasting.

    It might not be a 1 in 100 year boom that we have just enjoyed.

  3. From the 60s to the early 00s average around 2% compared to current around 8%. Sureley a recession.