BRICS countries’ attempt to create a currency basket to replace the US dollar is unlikely to succeed due to their limited global economic influence, holding only 1.5% of global trade and 5% of international reserves.
The proposed BRICS currency basket is considered a “terrible idea” as most member countries are “monetary basket cases” with histories of hyperinflation, particularly Brazil, Russia, and Iran.
The US dollar’s value is primarily influenced by the amount of dollars printed, which is directly related to federal deficits currently approaching $2 trillion and rising rapidly.
Recent increases in gold prices may be signaling potential instability for the US dollar in the near future.
The BRICS group, led by China and Russia, is characterized as “anti-dollar countries” seeking to challenge US economic dominance, despite their limited capacity to do so effectively.
Newmont’s Q3 saw an 85% revenue increase to $4.6B and 30% gold production rise to 1.6M oz, but a 133% cost surge to $1,600/oz led to a 14% share drop, highlighting the impact of high costs at large projects like Cortez and Turquoise Ridge.
In a rising gold price environment, miners with thinner margins often become the best investments, as their profits expand much faster on a percentage basis than better-performing miners with fatter margins.
Newmont’s rationalization process, including divesting non-core projects, aims to improve margins over time, but the company’s focus on digesting the $19B Newcrest acquisition may limit M&A activity in the near term.
Silver’s breakout above $3,250 and subsequent correction to $3,350 is crucial, with $50 in sight if gold continues to rise, offering significant leverage opportunities for investors.
The change in Mexican leadership has reduced risks for silver mining companies, but a risk discount remains, while companies like Aftermath Silver, not based in Mexico, offer leverage to silver prices and potential for catch-up trades.
Nyerere’s authoritarian socialist policies led to Tanzania’s industrial sector operating at 10-30% capacity by the 1980s, with inflation averaging 35% per year and per capita real income falling by 12% from 1980 to 1985.
The forced relocation of a majority of Tanzania’s population into villages resulted in inefficient communal agriculture, causing the country to transition from a maize exporter to an importer over a decade.
Despite jailing thousands of political prisoners and reports of torture, Nyerere’s regime won elections with majorities typically seen only in communist countries, while paradoxically remaining a favorite of Western intellectuals.
Socialist policies triggered a brain drain, exemplified by the replacement of African railway workers with Chinese personnel at virtually all levels on the crucial railway to Zambia.
Despite receiving more foreign aid per capita than any other country, Tanzania experienced widespread economic decline, with nationalized firms going bankrupt and once-prosperous areas like Zanzibar suffering frequent power outages.
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