It is certainly a pleasure to get back to the familiar circumstances of my writing studio after a period of particularly heavy traveling.  During those travels to Mexico, Toronto, Calgary and Mexico again, a great many news events have taken place and what follows is a potpourri commentary on several of them.

First, however, it is important to report that the latest U.S. jobs report which was released this morning for the month of March contained the bombshell news that the number of new jobs created that month was only 121,000, down sharply from the February figure of more than double that number.  Although stock markets are closed today for the Good Friday holiday, trading in American futures for the Dow Jones industrial Average traded for a short time and during that hour, the futures went from plus 20 to minus 120, thereby predicting a sharply lower opening for Monday's markets.

It is also interesting to speculate on the public's reaction in terms of voting in the coming November Presidential election.  Poor job performance can hardly help the Obama re-election effort which had actually be gaining some traction in recent months.  However, in our opinion,  little could derail his chances for re-election as fast as the onset of a "double-dip" recession just prior to the election.

In terms of the political influence on mining, we would regard this news item as "good news - bad news."  The good news is that a Republican administration would likely be less inclined toward complex regulations, and this would help mining.  The bad news for mining, particularly for the precious metals, is that a Republican Administration would likely have a more conservative financial structure, which could indicate less future inflationary pressures.

It's still early in the season and we do not doubt that there will be many 'bombshell' events brought to our attention in coming months.

Given the number of times I have visited Mexico in recent years, I found a report that the Mexican Peso had reached its highest level against the US Dollar in six months to be of more than slight interest.  After all, everyone "knows" that Mexico is beset by drug wars and the Mexican economy is in turmoil.

Actually, I have found that for the most part, the drug war primarily affects only the people directly involved, such as members of drug gangs or police and has a much lesser effect on the general public.  And, as far as the economy is concerned, Mexico is beginning to benefit directly from increasing American investment in Mexico such as a new auto body stamping plant in Hermosillo which will employ 1,000 workers.

It is also well worth noting that mining is making a substantial contribution to the prosperity of many towns and villages near proposed or actual new mining ventures by hiring large numbers of workers, providing lucrative business for nearby merchants and by paying taxes to local, state and national governments.

Two articles of particular interest to mining caught our eye.  In the first case, the Zimbabwean government just provided yet another reason why we believe any mining executive who contemplates serious investments in that nation should perhaps reconsider such a path, to put things mildly.  That nation's youth minister has just informed the mining industry that the government is now threatening to take majority positions in mining ventures that had failed to already turn over majority interests to local governments - sort of a "heads you lose - tails you lose" situation for foreign mining operators. 

The Zimbabwean government appeared to try to distance itself from the minister's comments by stating in an oblique manner that it was not planning to actually nationalize any companies but the minister, named Saviour Kasukuware, not only refused to back down but also stated that he also threatened to include foreign banks operating in Zimbabwe as well.

His comments reflect the complexity of Zimbabwe's "indigenization" policies whereby local indigenous populations are to be handed significant portions of companies' assets.

The other mining story had to do with coal and reflects the ability, in my opinion, of the environmental movement to triumph over common sense.  The case at hand is a ruling by the American Environmental Protection Agency (EPA) which relates to the construction of new coal-powered electric power plants. 

The EPA just announced that it has concluded that due to its policies requiring the installation of excessively complex and expensive "capture-and-sequestration-systems" it expects that no new coal-fired plants are likely to EVER be built in America.  While the EPA statement related primarily to new coal-fired plants, environmental commentators celebrated by stating that the new rules may also have the effect of forcing many present coal-fired plants to shut down as well.

Coal mining is big business.  Like mining in Mexico, it hires huge numbers of workers and pays vast sums to transportation companies, equipment providers and service suppliers while their taxes fund many government operations.

We must also ask, "If coal-fired plants - which currently provide a substantial portion of all power generation - are to be eliminated, just what is going to take their place?"  Environmentalists hate other fossil fuels as well as nuclear facilities and the hoped-for 'renewable' sources are for the most part capable of satisfying only the tiniest proportion of total electric power requirements.

Despite the fact that we are told over and over again that the European economic crisis is being 'solved', the same problems keep breaking out over and over again.  Please consider the following:

In Italy, the new Prime Minister, Monti, had attempted to have one of the trade unions favourite rules revoked, in order that companies could have greater leeway in hiring and firing.  He just caved in to allow the rule to remain in effect.

In Spain, where reforms are desperately needed to restore economic sanity and reduce their 23% unemployment rate, Spanish workers are now mounting furious demonstrations, including actual national strikes, against any attempt to reform that country's labour laws.

In a multitude of other countries, specifically including students in Montreal here in Canada, it is proving difficult to impossible to break the mentality of 'entitlement' which seems so pervasive within many societies.  Many members of the public would appear to prefer keeping things as they are and, to hell with any considerations such as deficits, mammoth taxes, etc.

Wasn't it Albert Einstein who once wrote that one of the definitions of insanity was to do the same thing over and over again while expecting different results? 

That seems to us to be the way of the world and we believe that it will lead to renewed and much more serious crises during the months and years ahead, which is why we continue to suggest the holding of insurance positions in "things" down the road.

All financial markets are closed today, but some commodity exchanges are offering some 'spot' quotes on an 'as-able' basis.  Those quotes indicate that gold and silver will open higher on Monday, crude oil also higher, financial markets lower and the US Dollar lower.

Please accept our best wishes for a truly meaningful Easter weekend!

PERSONAL NOTE:  With all my recent travels in mind, it may seem strange that I am eagerly anticipating yet another trip, but that is the fact.  My wife, Thama, and I will be joining good friends and will be taking a holiday cruise through the Panama Canal with travels beginning April 12 and ending April 27 in Fort Lauderdale, FL before flying home on the 28th.

Accordingly, The Melman Report website will likewise be on hiatus during that period of time.

We plan to file "Melman Minutes" for this coming Monday and Wednesday and then resume them on a regular basis once again on Monday, April 30.