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This weekend sees the debut of ‘Formula E’ racing in London.As the name suggests, the competition is basically a small-scale version of F1 with one big twist – all the cars are powered by electricity rather than petrol.Sure, the top speed of around 150mph is still a long way off the 200mph-plus speeds you see in F1. Yet the fact that electric cars are racing around tracks at even these high speeds proves once again that electric cars are coming of age.That’s great news for the manufacturers of the cars and their components. However, it’s even better for the miners extracting one of the key minerals used in them…Most modern electric cars depend on lithium batteries. Lithium has a big advantage over other metals: it has a very high energy density. In other words, it can store a relatively large charge while keeping the battery small and light. This is a particularly important factor in cars, where excess weight can reduce top speeds and increase … [Read more...] about Why an electrified version of F1 is great news for these mining stocks

A sovereign wealth fund is a marvellous thing.You happen to govern a country that is blessed with natural resources. You are foresighted enough to realise that you probably shouldn’t blow the entire windfall at once. So you set up a big savings pot – your sovereign wealth fund (SWF for short).And over the last decade or so, amid the commodities boom, you’ve watched the cash pile up. A lot of cash. In fact, I’ve lost track of the number of times that I’ve seen SWFs described as a ‘wall of money’, just waiting to flood global asset markets.But what happens when the fat years end, and the lean begin – and that wall of money starts to crumble?I’m guessing we’re starting to find out…Saudi Arabia isn’t used to being strapped for cash. With oil at more than $100 a barrel, its income more than outstripped its outgoings.It could spend on keeping the populace happy. It could spend on insulating itself from the Arab Spring. … [Read more...] about This ‘wall of money’ is collapsing – that’s bad news for markets

The US Federal Reserve still plans to raise interest rates further this year.It’s also looking at shrinking its balance sheet (ie, going some way towards reversing quantitative easing).That all sounds like a recipe for a stronger dollar and a weaker stockmarket.So why is Wall Street still hitting record highs?The Federal Reserve released the minutes from its latest interest-rate setting meeting yesterday.The Fed reckons it will “soon be appropriate” to raise rates again – in June, in other words. It also thinks that the relatively weak growth seen in the first quarter of this year was “transitory”, and that recent weak inflation is also “transitory”.In other words, it’s sticking to the course of gradually raising interest rates and it’s even thinking about ending quantitative easing altogether. (At the moment, when any of the bonds that it holds mature, the Fed reinvests the money in more bonds – so the central bank … [Read more...] about The US dollar has further to fall – which is good news for markets

Democracy is a great thing. I’ll argue the point with anyone who says it isn’t. (My main argument being: what do you replace it with, oh wise one?)But that said, it’s possible to have too much of a good thing. And if you live in the UK (and plenty of other places for that matter), you might be a bit sick of voting at the moment.If so, I’ve got bad news for you – it’s starting to look like we’ll be going to the polls again before too long…As I write this morning, there’s a lot of talk about a snap general election being called in the UK, for 4 May (there are local elections happening that day, so might as well throw in the main deal as well).The prime minister would need to put it to the House of Commons, because we now have fixed-term parliaments. There she’d have to win the backing of two-thirds of MPs. But that’s probably only a minor hurdle.Prominent Tories are keen on the move. Earlier this month, William … [Read more...] about Tired of elections? I’ve got some bad news for you

Today, at 12 noon, the Bank of England will make some noises about interest rates.It won’t raise them, of course.Instead, the market’s focus will be on exactly how many dissidents on the Monetary Policy Committee think that having a 0.25% interest rate at a time of full employment and soaring credit levels is starting to look like a foolish idea.Today’s outcome will swing sterling about one way or the other – two votes or fewer for a raise will probably weaken it, three or more will strengthen it.But unfortunately, none of that will solve the problem of how to get a decent return on your savings in a world where the central bank hates you…Once upon a time, the Bank of England had an official inflation target of 2.5%. This was based on a measure known as RPIX – the retail price index (RPI) excluding (hence the “X”) mortgage interest payments.Why do you exclude mortgage costs? Well, the whole point of having an inflation target is so … [Read more...] about Bad news for savers – positive real interest rates are a long way off