Lee just emailed that copper had dipped below my personal alarm of $3/lb.
Why did it dip? This story from China is directly related. You will remember that China had a problem a few months ago, when a shadow bank debt service was reportedly not going to make it on time. I think it was for $160 million, and the world markets freaked.
Can this be papered over? Beats me - we are watching the entire system coming apart with twitches here, spasms there, hints over yonder...
All rational data points affirm that implosion is imminent.
If copper remains under $3 for any length of time, watch out for falling anvils.
Kerodin
III
Another thing I have been watching is lean hog prices, they have increase about 65 percent in the last few months. The prognosticators reason don't seem to tell the real story. The purposeful destruction of the herd does.
ReplyDeleteGot Lead? The other white meat. ;-)
Lee
III
I guess I don't understand why its a big deal if copper goes down??
ReplyDeleteRob: Copper is a very telling indicator of future industrial activity and $3/lb is a low-water mark. It's been hanging under that level for a few days now. If it stays there or bad news comes from China anytime soon, it's a bad thing.
Deletehttp://www.kitcometals.com/charts/copper_historical_large.html
Well, it remains to be seen if it's a bad thing overall, but you're very right that it's a big thing...huge. Cu hit four year lows yesterday, and lumber dropped about 4% in a day...both indicators of ACTUAL future production. Corn and wheat didn't though, not a good sign at all for those who have to eat.
ReplyDeleteOf course, you have to keep in mind that actual "markets" have been gone for years, and copper in particular is tied up as collateral for Chinese credit. So it's kinda hard to tell what anything really means.
Commodities have been screwy for about a week now. IMO this is the very early stages of the Central Banks finally beginning to lose control, especially considering that the US dollar--the lynchpin of the whole thing--has lost about 1% against other terribly weak currencies.
Personally I think Central Banks losing control is a good thing overall, maybe a great thing, but there'll be a ton of suffering along the way. "Reality is the final arbiter."