The following commentary was sent by e-mail yesterday to Subscribers of StockResearchPortal.com. StockResearchPortal.com, a research website currently focused on the approximate 1,600 Mining and Oil & Gas companies listed on the Toronto and Toronto Venture Stock Exchanges, was introduced to the Internet 20 months ago. There already are over 10,000 Subscribers from over 120 countries. You can visit the website by clicking here.

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In recent e-mails I have summarized and commented on several U.S. economic statistics. You can access those e-mails by clicking here. In summary:

· beginning shortly after 1973 the U.S. has consistently experienced recurring annual trade deficits. The quantum of these trade deficits increased significantly after 1999. Today the cumulative U.S. net trade deficit stands at approximately $7.4 trillion, and continues to accumulate at a rate of approximately $30 billion each month - see my October 8 e-mail;

· the U.S. National Debt currently stands at approximately $12 trillion. I think it will continue to rise for the foreseeable future given what I think the annual fiscal deficit run-rates likely will be, and what appears to me to be an unwillingness/inability of the U.S. Administration to cut Federal spending - see my October 26 e-mail;

· to September, 2009 the U.S. has lost something in the order of 1 out of every 3 U.S. manufacturing jobs that existed at the end of 2000. Recent and current U.S. Administrations and economists have talked, and continue to talk, about the conversion of the U.S. economy from a ‘manufacturing based economy’ to a ’service and technology based economy’. As late as this morning I read and posted another article that talks about a ‘U.S. Jobless Recovery’ - I simply don’t believe such a thing is possible in a way that would be meaningful in the longer term. I believe that manufacturing (not service) is principally where value ultimately is added, and as a result of these job losses, the continued increasing U.S. cumulative net trade deficit, and the continued escalating U.S. National Debt it seems to me that every month the U.S. becomes increasingly dependent on its trading partners. The most recently reported U.S. unemployment rate is 10.2%, but many commentators believe it is much higher than that because many unemployed U.S. residents have ’stopped looking for jobs’ and are not counted as unemployed. Further, I do not believe that in the end it is practical for the U.S. to exercise ‘protectionist policies’ to recover manufacturing jobs in meaningful numbers - see my October 28 e-mail;

· I believe U.S. Consumer Confidence and U.S. Retail Sales (the latter being a fundamental ‘economic recovery driver’) will need to pick up significantly to turn the U.S. economy around in a meaningful way, and that unless U.S. residents ‘get back to work’ I don’t see meaningful U.S. economic recovery happening. Unfortunately, I don’t see U.S. employment picking up in a meaningful way any time soon - see my November 2 e-mail;

· I believe the current state of the U.S. Housing market has to be negative to U.S. Consumer Confidence and U.S. consumer spending. I see the U.S. Housing market linked to the U.S. job market, and hence again don’t see the U.S. Housing market returning to pre-2008 levels any time soon - see my November 5 e-mail.

Combining my foregoing views, while I would like to reach a quite different conclusion, I see the U.S. economy as:

· having undergone ’sea change’, particularly after 1999. As contrasted with pre-2008 U.S. economic conditions, I believe this will continue to negatively impact the U.S. and its residents going forward;

· increasingly becoming ever more dependent upon its trading partners and their goodwill - particularly China; and,

· unlikely to recover economically by any meaningful measure in the foreseeable future.

Given the U.S. political structure and what I see as the inherent ‘built-in inefficiencies’ of any democratic process, I will be surprised if the current or any other U.S. Administration will be able to ‘balance its budgets’ in the foreseeable future. Without doubt I believe in democracy over any alternative. However, the wheels of any democracy inherently makes it a long and painful process to turn the ‘Queen Mary’ 180 degrees - in circumstances where I think time for U.S. economic reconstruction is short. Finally, going forward as ‘globalization’ and ‘country interdependence’ increase, I think it may prove to be increasingly important that not all of the U.S.’s trading partners share the same philosophies and ideologies that the U.S. embraces - and that this may work to the economic detriment of the U.S. and other currently ‘developed countries’

The price of gold stands at U.S.$1,112 this morning at 7:52 a.m. Eastern Time. Given what I see as very substantive current U.S. and other developed country economic uncertainty, and where the fiat U.S.$ is the World Reserve Currency, this comes as no great surprise to me.

Disconcerting/Scary Article

Click here to read an article published yesterday (Wednesday) titled ‘Globalization brings a world of hurt to one corner of North Carolina’. I find the article both disconcerting and scary at the same time. Lest Canadian’s reading this e-mail think this can’t happen in Canada, I suspect many of the residents of St. Thomas, Ontario have substantive concerns following Ford’s recent announcement of the closure of its assembly plant in their city.

Concluding Comments

It is easy to be a critic. It is much more difficult, and far more productive, to find ’solutions’ rather than simply identifying ‘problems’. My ‘glass’ has always been somewhat more than half-full, and I have spent a great deal of time looking for ‘the light at the end of the tunnel’ for the U.S. economy going forward. I have concluded that U.S. ‘political realism’ is the key to U.S. economic recovery (whatever that ‘recovery’ ultimately turns out to be), particularly in the context of U.S. politicians collectively doing a ‘reality check’ on the U.S.’s current and prospective economic place in the world, and working co-operatively based on that reality to balance the U.S. budget at the earliest possible date. I hope those things happen soon, but am not optimistic they will.

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