Comments on: China’s Consumption Doesn’t Ensure a Continued Commodity Bull Market http://www.dailyreckoning.com.au/china-commodity/2007/02/21/ An independent perspective on the Australian and global investment markets Sun, 08 Nov 2009 09:45:07 -0600 http://wordpress.org/?v=2.8 hourly 1 By: peter kups (reallist) http://www.dailyreckoning.com.au/china-commodity/2007/02/21/comment-page-1/#comment-1737 peter kups (reallist) Thu, 22 Feb 2007 07:09:38 +0000 http://www.dailyreckoning.com.au/china-commodity/2007/02/21/#comment-1737 ralph has no idea where gold and silver are heading!! ralph has no idea where gold and silver are heading!!

]]> By: peter kups (reallist) http://www.dailyreckoning.com.au/china-commodity/2007/02/21/comment-page-1/#comment-1736 peter kups (reallist) Thu, 22 Feb 2007 06:56:29 +0000 http://www.dailyreckoning.com.au/china-commodity/2007/02/21/#comment-1736 what a cabbage !! what a cabbage !!

]]> By: Brendan http://www.dailyreckoning.com.au/china-commodity/2007/02/21/comment-page-1/#comment-1733 Brendan Thu, 22 Feb 2007 02:55:27 +0000 http://www.dailyreckoning.com.au/china-commodity/2007/02/21/#comment-1733 Many economists like to treat the whole commodity group as one. I think that is a wrong way to look at commodities. Different commodities, ie base metals, have different supply and demand situations. Aluminum inventory is in abundance, China is producing huge amount of aluminum every year, there will not be any shortage of aluminum in the near term. Whereas lead and tin supply are so little, any supply disruption (which is happening to tin and lead now) will push their prices to a much higher level. Copper has become a gambling pawn for hedge funds, rather than an investment class. There is hardly any explanation for their price movement except for hedge funds' and banks' trading activities. Nickel price has overshot its fundamental value in my view, now the price level is only at the mercy of the hedge funds who are controlling the remaining inventory level at LME warehouses. There is little demand for nickel now, a lot of stainless steel companies had closed down, because cost of nickel is way too high. All the bullish news of high demand for nickel are being exaggerated. Many economists like to treat the whole commodity group as one. I think that is a wrong way to look at commodities. Different commodities, ie base metals, have different supply and demand situations.

Aluminum inventory is in abundance, China is producing huge amount of aluminum every year, there will not be any shortage of aluminum in the near term.

Whereas lead and tin supply are so little, any supply disruption (which is happening to tin and lead now) will push their prices to a much higher level.

Copper has become a gambling pawn for hedge funds, rather than an investment class. There is hardly any explanation for their price movement except for hedge funds' and banks' trading activities.

Nickel price has overshot its fundamental value in my view, now the price level is only at the mercy of the hedge funds who are controlling the remaining inventory level at LME warehouses. There is little demand for nickel now, a lot of stainless steel companies had closed down, because cost of nickel is way too high. All the bullish news of high demand for nickel are being exaggerated.

]]> By: Ralph Petrillo http://www.dailyreckoning.com.au/china-commodity/2007/02/21/comment-page-1/#comment-1732 Ralph Petrillo Wed, 21 Feb 2007 14:41:44 +0000 http://www.dailyreckoning.com.au/china-commodity/2007/02/21/#comment-1732 Interesting to note that in the last ten years of economic expansion, commodities have been in demand. This is due to the fact that many Western nations desire to manufacture in China to take advantage of lower wages and benefits. However, there is a zero sum game. For if less maufacturing is occuring in Noth America, the demand for raw materials is actually declining in the Northeast. The Iraqi war has stimulated the U.S economy with short term government financing in U.S. of job market. When Iraqi war settles down, and surplus of oil from Iraq htis the market in an efficient manner, there will be asignificant over supply of oil on the market. It appears that Presdient Bush is delaying the end of the Iraqi war to set a premium in the oil and gas sector. The greatest threat in the next five years is the threat of deflation, not inflation. While jobs are created in the U.S. , wages are declining for avergae worker. That is why demand for gold and silver on consumer demand side is weak. The only support for gold and silver is due to etf's, which have gained nicely with their introduction. However when there is a sell off in gold and silver, and the etfs are forced to liquidate, Gold will head back to $ 400 in a very quick manner.Silver is overpriced at $ 14. Silver will probably test $6 , then head to ten, before collapsing to $4 by 01/09. If you can finance a short of silver it will be profitable. There is an over supply of silver comign with new mines coming onto market. Interesting to note that in the last ten years of economic expansion, commodities have been in demand. This is due to the fact that many Western nations desire to manufacture in China to take advantage of lower wages and benefits. However, there is a zero sum game. For if less maufacturing is occuring in Noth America, the demand for raw materials is actually declining in the Northeast. The Iraqi war has stimulated the U.S economy with short term government financing in U.S. of job market. When Iraqi war settles down, and surplus of oil from Iraq htis the market in an efficient manner, there will be asignificant over supply of oil on the market. It appears that Presdient Bush is delaying the end of the Iraqi war to set a premium in the oil and gas sector. The greatest threat in the next five years is the threat of deflation, not inflation. While jobs are created in the U.S. , wages are declining for avergae worker. That is why demand for gold and silver on consumer demand side is weak. The only support for gold and silver is due to etf's, which have gained nicely with their introduction. However when there is a sell off in gold and silver, and the etfs are forced to liquidate, Gold will head back to $ 400 in a very quick manner.Silver is overpriced at $ 14. Silver will probably test $6 , then head to ten, before collapsing to $4 by 01/09. If you can finance a short of silver it will be profitable. There is an over supply of silver comign with new mines coming onto market.

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