There are several components of demand. There’s real economic demand (you need the stuff to make other stuff). There is investment demand (you’re buying it in order to make a profit from what you think the price trend is. There is also pure speculation, and it’s possible that some middle-men were flat-out speculating by buying alongside China’s State Reserve Bureau (sort of like the banks and brokers in the U.S. buying Treasuries ahead of the Fed late last year to improve Q4 earnings).
July 1st, 2009 | Dan Denning | 1 comment | ContinuedAll Posts Tagged With: "treasury market"
Everyone We Know Expects a Fairly Quick Up-move in Inflation
“It’s a very funny and troublesome situation,” said a fund manager in Boston last night. “The world’s central bankers are committed to a policy of monetary inflation…which they call ‘Quantitative Easing.’ And they believe that inflation targeting is the way they can tell if their policy is working.
May 19th, 2009 | Bill Bonner | 1 comment | Continued