Since Ronald Reagan’s election to the august office of the presidency of the United States, the most visible contribution to the economy so far is the word “Reaganomics.”
No economic dictionary carries it, and so the full meaning is best known to Mr. Reagan and his economic advisors. But what it has come to stand for is a game plan of balancing a budget by way of cutting personal income taxes over the next four years and increasing expenditures at the same time.
One may wonder at the wisdom of this strategy, but this is what Reaganomics is. Despite clear and loud warnings from Wall Street about its non-workability, the U.S. Congress has let the president have his way.
To lower the rate of inflation, he let the U.S. Federal Reserve pursue a tough monetary policy without realizing the devastating effect it would have on the economy of the Western World.
The inflation rate has not come down much, but high interest rates, a product of the tight money supply, has pushed the U.S. to recessionary depths. — M.R. (Mort) Brown, Editor
It has been another grim year for Canada’s iron producers, with sagging demand for steel forcing still further cutbacks in production. Nor is any early turnaround in sight.
“It’s not a happy situation,” says Brian Mulroney, head of Iron Ore Co. of Canada. “In fact, it’s god-awful and we see no improvement.”
Nor does the federal government.
As for Canada’s iron ore exports, little increase is envisaged over the next decade. The American steel industry, our largest export market, is turning more and more to their domestic taconites as a source of ore, and competition from Australia and India largely precludes our expansion in the Japanese market.
Transpacific Asbestos has submitted a proposal to acquire control of troubled Advocate Mines, which plans to close its asbestos mine in Baie Verte, Nfld. Transpacific hopes to use the operation as a showcase for its newly developed wet milling process.
Transpacific proceeded with the proposal after a meeting of unsecured creditors who voted to defer payments owing until after the mine closes. A negative vote would have bankrupted Advocate immediately.
South Africans are having to swallow some pretty depressing news these days, which only shows that the country is not immune to the economic malaise afflicting the rest of the world.
Two South African producers, Rustenburg and Impala, supply about 70% of the platinum reaching Western markets. A month ago, Impala’s chairman said the company deferred its plans to increase production to an annual 970,000 oz. Now the company is cutting output by 10-15% in an attempt to shore up the US$475-per-oz. price.
Adding to producers’ problems is the virtual disappearance of speculative buying of metal.
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