Minerals commodities prices and how greed can be good

Posted by John under Manufacturing

Companies based in certain countries own stock in mining companies in Australia and they also own large areas of land there. The natural commodities are apparently being stockpiled in some countries for future conversion to money to when those countries need it. There is one big future problem for Australia with that idea but there is a current solution.

Donald Trump said last month in Australia that the price of Australian natural mineral commodities (uranium, iron ore, gold, oil and natural gas being the most in demand) should be significantly increased when selling to countries like China. The theory here some people thought is that the Australian manufacturing industry could be saved. There may be some cons to this idea but there are some pros also and the latter is what I would like to comment on here.

Most Australian mining companies and land should always remain in the hands of Australians. If the current pattern of selling off everything in Australia continues so foolishly and cheaply then no one can be surprised when other countries rip off Australian companies and landowners later (you cannot trust that it will not happen). Natural minerals resources and a small amount of land should be sold at the highest price now.

“Greed is good” one movie character (“Gordon Gekko” below) once said and there are some circumstances when it is good. If it saves the manufacturing industry for example and therefore the livelihoods of millions of workers then it is good greed. The market price should always be significantly higher than the natural price (the full cost of bringing natural minerals to market) for those that have a huge demand for what they need to buy. That in turn raises prices for the goods the buyer creates. It also creates a more level playing field so people buy locally instead because there is no need to go offshore if the price is similar.

What better country to start doing all this than Australia? It is one of the world’s biggest producers of natural minerals and it has vast areas of unused land. Yet some of this is largely being almost given away for free. Unbelievably stoopid! Successive Australian governments are extremely greedy and always look for ways to increase taxes to burden citizens that cannot afford it. They could instead be trying to screw the business world more, like Donald Trump says Australian mining companies should do to China. Put the prices up, create that level playing field, save local jobs and greedily grab more taxation revenue (without an unnecessary “carbon tax”). It really is not that hard!