commodity price inflation
commodity price inflation
Here's the link if you want to see for yourself.
http://www.cnbc.com/id/35313321/
$copper has a clear five waves up from the 12/08 low. The most that can be expected is an ABC retracement or a triangle shaped chop zone to consolidate the price gains. The price action is clearly bullish.
The commentator's premise is that the Chinese are overbuying and the excess stock will return to the market as selling. He must either be alone in that assessment or want to get in at a lower price and needs sellers. Commodities have been way bullish since 2001 or 2002 and the fundamentals have been solidly in support of this.
There have been other news reports, the Chinese are seeking the control the markets for 'rare earths metals' used in electronic devices. The Chinese are pretty consistently seeking to secure supplies of essential commodities, like copper, oil. They have been both buying and investing in companies and governments that have the resources to offer. Their buying is obviously long term and consistent. They could also be diversifying out of their fiat currency reserves into hard and strategic commodities. Chinese buying and investment of this type has been consistent for years. Do not stand in front of the train when it is moving.
Global growth rates are expected to continue positive into the future, especially in modernizing large countries like China, Brazil, India. They have a long way to go in infrastructure investment to catch up with the US and Europe. The US is expected to be sub par, investment wise. Capital investment = real demand.
For first world growth to continue, their governments have no choice but to inflate to currency (by government deficit spending). Weaker currency = commpdity price inflation. Copper and oil prices have been dominated recently by trends in foriegn currency exchange rates. Copper is down recently because the dollar has been rallying.
The only thing that could possibly slow global growth is a mini ice age (Landscheidt).
