Posted on 09/21/2011 1:44:10 PM PDT by blam
Copper And Copper Stocks To Collapse Much Further
James A. Kostohryz
September 21, 2011
The Malthusian ideologues of "peak everything" fooled an outsized portion of the investing world into believing that commodities and commodity stocks could only go up.
Even if these Malthusian prophets of scarcity were correct in their basic theory about the long-term supply and demand fundamentals for commodities (I think that they are partially correct depending on the time-frame you look at) the fact is that they are only correct from a secular standpoint, if at all.
The problem is that many of these folks have confused secular with cyclical and seem to believe that it's all the same. It is not.
The business cycle has not been repealed. Neither has the basic fact that the prices of commodities are cyclical. Commodities prices fluctuate wildly with the business cycle. That has always been the fact and it always will be.
The Malthusians seemed to forget this basic fact while they were "laughing all the way to the bank" to go on margin and buy more commodities. Too bad they did not remember that in global economic downturns, commodity prices fall, and fall hard.
Malthusian ideology is the only explanation I can think of why analysts are shocked that the price of copper has fallen. With deteriorating global growth prospects evident months ago, the only shock should be that they had not fallen further and sooner.
What should be of even greater concern is that analysts do not seem to have come to grips with the fact that in the kind of global economic environment that we are in right now, copper prices cannot be sustained at current bubble-type prices of $3.72 per pound.
In an article published on August 9, 2011, I wrote that,
(snip)
(Excerpt) Read more at seekingalpha.com ...
So I can tell my client I actually saved them money by being late with the electrical drawings.
Hope that works...
When is wire gonna get cheap again?
Great, I guess thieves are going to stop stripping copper wiring and bring it back
I’m putting all my money into tulip bulbs, it’s time for them to cycle around again.
About 12 or 14 of my lettuce plants went to seed and I have been diligently harvesting, cleaning out, and sorting the seeds.
I got a BOATLOAD of lettuce seeds!!
Cabbage, broccoli, onions, and peppers also!
$3.80 is hardly a collapse. Look at the 5 year chart of copper. Even with our slumped economy it is still high.
http://www.kitcometals.com/charts/copper_historical_large.html
Like silver below $40. If it goest below $20 I’ll call it a collapse.
And if gold goes below $1200 I’ll call it a collapse.
I wish these graphs would be accompanied by thumbnails showing them to true scale (referenced to zero). We would see a fair ripple, but not a catastrophic plunge, and much of it due to dampened demand for copper as building initiatives languish.
Excellent point!
Lying with graphics is easy. Here’s a brief how-to manual (one of many on-line — sorry, I don’t have a graph to go with that):
http://www.win-seminar.de/visualisierung-praesentation/Mit-Grafik-Luegen.pdf
Ha, the last Tulip Mania was in 1637 so it’s gotta be time for another one. Is it time for Lettuce Mania?
When is ammo going to get cheaper?
After the coming Civil War.
I’m not sure.
I know this:
You CAN’T EAT GOLD!!!
I also know this:
You CAN’T SPEND LETTUCE!!!
So we’re probably just wasting our time, eh?
;-)
Here near Seattle there are three or four varieties of wild lettuce. Actually, not bad at all if you get them very young. But it grows fast, and gets spines and turns woody pretty quick.
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