"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Friday, July 1, 2011

Australian Reserve Bank Director issues sobering warning

A reader from New Zealand sends us an article from down that way reporting on a speech given by  Australian Reserve Bank Director Warwick McKibbon. I am including the link here as it needs to be read in full. I find the contrast between his sobering assessment of things and that of the many of the US financial authorities quite remarkable. By the way, I must mention that I have always found the RBA to be one of the more sensible and solid Central Banks.

The article is entitled:

"GLOBAL 'TRAIN WRECK' COMING". That pretty much says it all.

Here is the link.



  1. Thanks Dan, as always I find your postings invaluable.

    Do you think that Australia's Reserve Bank director Warwick McKibbin's pessimism about the future of "mining" in Australia bodes poorly for PMs in general? For a while I have been under the impression that a global slowdown would put pressure on currencies and thus strengthen the PM market. But more and more I am starting to think that a global slowdown (certainly a US equity slowdown) will be beneficial to the US dollar and in a deflationary environment could substantially weaken the PM bullion market.

    Then that begs the question, what happens in a Global Slowdown (coming this fall according to many) once the Fed has sufficient cover to resume QE-whatever? Is it possible to have a global slowdown, a falling US dollar, rising PMs and commodities and New QE all at the same time? Boggles the mind (this mind).

  2. Cheers Dan. I'm from NZ and did read this early morning NZ time. I be keen to get in touch with the person who sent you this, I am the only one I know of who reads this sort of stuff, so be keen to make contact. PM me?

  3. Maybe you can't. Email me top_shotmx8(@)hotmail(.)com

  4. Run_GLD

    I regularly read McKibbin. I don't think the comment that "... the coming crisis could undo Australia's mining boom ..." means he is categorially pessimistic on the future of mining here (which by the way means mainly iron ore and coal). I see it as outlining one scenario. Its a certainty the mining boom will end, the question is when.

    I will defer to Dan and others but my belief is inflation is equivalent to fiat depreciation and is gold positive. Deflation is equivalent to fiat appreciation and is gold negative. Gold will decline but still outperform other metals (silver, copper) in a deflation since it is basically money.

    Hope my comments help; please let me know what you think.


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