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MINING INDUSTRY EVENTS

Al Azhar’s 14th International Conference on: Engin  - Conference
Dec 12, 2017 - Dec 14, 2017
WM2E 2017 Energy Tech Expo  - Exhibit
Dec 14, 2017 - Dec 16, 2017
George Fox Conference  - Conference
Jan 24, 2018
2018 SME Annual Conference & Expo  - Conference
Feb 25, 2018 - Feb 28, 2018

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MARKETPLACE


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The Mining Engineering, SME and NSSGA
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The Online Global Mining and Minerals Library Site
August 2017
Volume 69    Issue 8

2017 SME keynote; When are commodity prices going to rise?

Mining Engineering, 2017, Vol. 69, No. 8, pp. 45-45
Silver, Douglas


PREVIEW:

In 2008, I had the privilege of giving SME’s keynote address. At that time the financial markets were on the verge of collapse and my presentation described the issues. Unfortunately I was correct, and global markets went into a steep nosedive, creating the largest economic downturn since the Great Depression.

In hindsight, there were plenty of signs that this was coming. The Supercycle had created massive new wealth. This wealth was largely invested in the United States due to the country’s political stability and credit worthiness. In 2004, the large investment banks convinced the U.S. Securities Exchange Commission (SEC) to allow them to triple their borrowing leverage ratios. This made the banks more vulnerable to market volatility. The banks then lent money to NINJAS - people with no income, no job and no assets. Even worse was the fact that these unqualified home owners used adjusted-rate mortgages (ARMs) which they, of course, intended to refinance prior to interest rates rising. These mortgages were then bundled up by the banks and sold to investors as “safe” investment products. The money flowed into these products because the rating agencies gave these instruments high marks. These same agencies earned their fees from the very same banks seeking high ratings. (No conflict there…). Private debt exploded and peaked out in 2008. 



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