Far East Capital Newsletter
Rumble's Earaheedy Zinc Project is Looking Bigger and Better
24 Sep 2022

In This Issue

Rumble's Earaheedy Zinc Project is Looking Bigger and Better

We have had another week of rising interest rates, falling equity markets, a rising US$ and falling commodity prices. Nevertheless, the silver lining for the resource sector is the ability for our currency to fall relative to the US$, thereby providing a stabilising effect on real A$ prices being received. Australian gold producers are still getting around A$2,500/oz.

It seems as if the Fed is determined to expunge inflation through the strangulation method of higher interest rates that will bring on a recession. This is the easiest, no brainer method to suppress the economy. However, we need to consider what has been the cause of the inflation. The obvious answers are the Ukraine War and its impact on energy prices, with Covid related impacts also interrupting supply lines of materials and labour; but how do higher interest rates help to increase supply? The answer is that they don't.

So, what news flow will cause markets to rally, or even recover? The best news we can get will be the slowing of economies i.e. a recession, that will allow the interest rate rises to subside. The sooner we bring on the pain the sooner we can recover.

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