This is as opposed to natural resources such as timber, which re-grows naturally and can, in theory, be harvested sustainably at a constant rate without depleting the existing resource pool and resources such as metals, which, although they are not replenished, are not destroyed when used and can be recycled. It is a resource that can not be re-used.

That may be true in theory, but in practice there's a limit to how much can be recycled. What is the cost of extracting rebar from concrete, for example, or recovering copper and zinc from discarded appliances? Clearly it can be done, but some amount is always lost because it's cheaper to mine new sources than to obtain it through recycling. And as we all know, rust never sleeps. The part you lose to corrosion is gone forever.

I doubt Ecuadoreans see it that way either. To them, once it's mined and has left the country, like Elvis, it's gone.

That said, I don't believe we'll see a WFT. It's clear enough by now what would happen if they so much as hint at its return. I'm not even sure they can recover from the mess they've already made, WFT or not. That's what I think the market is pricing. It's not a popular view, and I sincerely hope I'm wrong, but I see Ecuador as a train wreck in progress. I don't put any stock in the fact that Correa is an economist either. Alan Greenspan is an economist. So is Alberto Acosta. That point is moot.

Truth is, there's only so much investment capital in the world, and the bull run in resources is already long in the tooth. That doesn't mean lower prices ahead, but returns on investment are shrinking as we speak, owing to a) rising energy costs, b) lack of qualified personnel, c) political risk. At present, A and B are intractable, so C is the only factor you can eliminate. You do that by not investing in places like Ecuador.

ebear