But what about copper ?

[syswizard]

I know everyone is talking about silver and gold. But here, in this weakening global economy, we have copper near $4/pound.
Is this an obvious short or what am I missing ?

 

[FrankSlaughtery]

not to nit pick but it's 3.73 which is not a small difference. just focus on the price not the economy b/c you don't trade the economy.

 

[syswizard]

Quote from FrankSlaughtery:

you don't trade the economy.

Really ? So there is no effect on commodities prices from economic activity levels ?

 

[syswizard]

Nice breakdown in HGZ2 today.

 

[fridaytrader]

Quote from syswizard:

Really ? So there is no effect on commodities prices from economic activity levels ?

of course there is effect...you'll see how QE3 will stimulate prices for commodities

 

[peilthetraveler]

Quote from syswizard:

I know everyone is talking about silver and gold. But here, in this weakening global economy, we have copper near $4/pound.
Is this an obvious short or what am I missing ?

Inflation. Thats what you are missing. Its like remembering when you were a kid and paying 75 cents for a comic book and seeing that they cost $3 today and being sure the price is too high and it will come down. It wont. Copper, silver and gold are all going up.

 

[oldtime]

Quote from peilthetraveler:

Inflation. Thats what you are missing. Its like remembering when you were a kid and paying 75 cents for a comic book and seeing that they cost $3 today and being sure the price is too high and it will come down. It wont. Copper, silver and gold are all going up.

what about a share of IBM. Will it also go up due to inflation?

 

[syswizard]

Point is guys: the QE3 inflation effect is really hitting the markets....and effectively providing a PUT option on commodities.
If this effect "ends", look out below.
If it doesn't, then shorting anything is stupid.

 

[fridaytrader]

Quote from peilthetraveler:

Inflation. Thats what you are missing. Its like remembering when you were a kid and paying 75 cents for a comic book and seeing that they cost $3 today and being sure the price is too high and it will come down. It wont. Copper, silver and gold are all going up.

yes, inflation is very important here

 

[syswizard]

Quote from fridaytrader:

yes, inflation is very important here

But it's not "real" .....yet : Wages must also start to rise...but they have been flat for years now.
Unless that occurs, we are NOT in an inflationary environment that is sustainable.