I am not a financial expert, by any stretch of the imagination. But I am a 46 year old man who has paid attention to such things for most of my adult life, and I'd certainly consider my knowledge as superior to any and every "Expert" currently working in Government and running our economy.
Given my caveat - don't make any financial moves based on my 2 cents alone - do your own research.
Here's a summary of a few items that has me coming to the conclusion that the jetliner is in a full dive, under power, and every day that passes makes it less likely we'll pull out of the dive for even a short respite.
You have all seen the counter-intuitive drop in gold and silver given the real world conditions that should have those numbers rising - gold should be over $2k per ounce and silver should be over $40, given the real state of the world economies. You have read the links over at NCRenegade that David has been providing. (Here is a related piece from David)
This morning Denninger posted his assessment of the Philly Fed report, which shows new orders and inventories dropping (meaning that companies are not bothering to replace current inventories of their widgets because they do not see an increase in future orders).
Metals represent tangible work. When businesses are buying metals, it is to build widgets. You can "trust" metals more than most other sectors (especially if you refuse to look at the speculative games) to be a true indicator of things to come.
Here's a significant marker to watch: Copper. Copper is a fundamental metal that is a very good indicator of near and mid-term future industrial activity.
The last few days it has been hanging in the 3.20/lb range.
In my personal matrix of "What is the economy going to do next" I have a $3.00 warning flag on copper - if it drops below $3 I expect it to immediately begin dropping through that floor and that, to me, spells real trouble.
Keep in mind - it is only one indicator. But when combined with the larger picture and when one connects dots, the conclusion is No Joy.
If copper drops below $3, look for many other aspects of the economy to drop on fears.
And the fears are justified...
Kerodin
III
What I keep hearing is that copper is regarded as a reliable indicator of economic activity. Copper drops, and you know that the gears are starting to gum up and the ships running out of steam.
ReplyDeleteI had posted this on another blog, but about a week back I had gone to the local coin shop to snag some bullion. This was on the day that gold had dropped $140. The store had suspended bullion sales for the day. That had me a little shaken. Sales resumed the following day, but the price over spot had increased slightly. Still snagged some though.
I remember seeing the Game of Thrones series being plugged with the phrase "Winter is Coming." Well, summer is coming now, and all the spooks seem to be awakening from their hibernation. Times are interesting. We'll see what the future has in store...
I dont know about using copper as a gauge because supply will be tightening with Utah's mine offline...
ReplyDeleteJust my two cents, over the last couple of months I’ve been watching the markets (metals/stocks) closely, there is no logic to the gains on Wall St, it is directly related to the counterfeiting going on at the Federal Reserve, the lack of availability of silver before prices started to tank is another sign of the coming unravelling, copper is just another indicator, the prices on iron/steel, aluminum and other recycleable metals is yet another indicator as well, as K has said, lead is the new gold,.... beans, bullets, band aids, put your helmets on kids its gonna get retarded.
ReplyDeleteRichard R Deaver
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