THE COMMODITIES CON
5 May 2010 by Guest
2 Comments
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Comments
Very Good Article TPC
AWF has posted a few months backs that the reason “The China” was buying metals and Oil was to trade its worthless dollars for “Hard Assets.
Submitted for your consideration from the “Twilight Zone”
How does China control its currency?
Simply stated by buying dollars—This has been a futile persuit for China–over the summer months (2009)–we all know the Dollar was in decline–So what did they do with all these dollars–They buy Hard Assests —These commodity charts show the obvious!
Plus—as stated above–a current account deficit gives “The China” cover from the political whim of “Larry, Curly and Mo”
Today its a different story in the “Currency” markets
We now have a ” Strong(Dead Horse)Dollar” “The China” does not have to Buy In to control its currency— consequently it DOES NOT have to turn over these dollars into “Hard Assets” which equals Less Demand for “Copper”/ Metals /Oil.
A few questions remain:
Was-Was ” Dr. Copper” giving a false “Buy Signal” on the US economy
And more importantly is the “Weakness in Dr Copper” a “SELL,SELL, SEll signal?
While I found the article interesting I just had one nagging problem with it. I do not follow the commodities market but being in Canada I closely follow many of the commodity companies. Here’s my problem with the article, most of the companies that I closely follow (Potash Corp, Thompson Creek Metals, most of the oilsands companies like CNQ) are 15% or more off their recent highs and I just wonder if this article is talking about the comodoties drop coming or the one that has already hit the market and the companies.