Please note, this will be an abbreviated Melman Minute due to travel schedules for our return to British Columbia.  However, several themes in the morning news are worth noting.

First, optimism is once again rampant among the world's political and financial media.  Where just one month ago, reams of stories were circulating which described a world ready to plunge into recession or chaos, quite suddenly the direction of news has turned around - and carried most financial markets around the globe to relative highs, with the Dow Industrials leaping by about 1,000 points during the most recent rally period.

Next, the ogre of Libya, Moammar Khadafi, is dead.  The exact details of how he died remain somewhat obscure, but unlike Osama Bin Ladin, his body has been on public display and his death been verified beyond any rational doubt.  The Libyan public is rejoicing and many observers believe his passing may be part of the "Arab Spring" where dictatorial regimes are being replaced by much more democratic governments which will be installed by open and free elections.

Adding to the optimistic mood, President Obama just announced a total troop withdrawal from Iraq by the end of the year.  Americans are thus rejoicing at the return of their soldiers and looking forward to a diminished drain on the national treasury.

Just this morning, the Wall Street Journal carried a headline that the tenor of economic forecasts has now been revised toward an improving economic outlook and this has been a factor in improving European and Asian markets overnight.

However, we would point out that there are two trains of thoughts of a slightly less ebullient nature.  First, the record of new Arab governments which have replaced previous tyrants so far has not been completely favourable as the new government in Egypt has been less cooperative with the rest of the world and less tolerant of other faiths within Egyptian territory. 

We would also point out that there is a distinct risk in pulling out all American troops so suddenly while very real risks remain and this was emphasized by a comment made by Iraqi Prime Minister Hamid Karzai to the effect that with America out of the picture, he would be inclined to support Pakistan in any future American - Pakistani conflict.

There is also the reality that with America gone, Iraq could become a 'Safe Harbour' for terrorist organizations such as Al Qaeda to set up training camps and communication centers hidden safely out of the public view.

Unfortunately, we must 'hit the road' at this time.  Overnight markets show gold up by about 17-20 dollars to near $1,660; silver, platinum and palladium also higher; and the base metals are moving strongly ahead by 2-3% across the board.  While mining share indexes have not yet opened, it is most likely they will also be moving to the upside.

In other markets, crude oil is trading near $88 per barrel while both the US Dollar and long term interest rates are trading close to unchanged early this morning.

All quotes US$ unless otherwise noted.

Next "Melman Minute" scheduled for Wednesday, October 26, 2011