How is the Dr. doing?

Much has been said about the predictiveness of copper prices for the outlook on the global economy and industrial activity. There is no doubt that the price of copper is dependent on supply and demand forces in the long term even as there has been increased speculation in copper as in everything else over the last several years. (At least, maybe decades..)

I notice a similarity in the trend of the price of gold as in the price of copper. Just as "everybody" can't believe the U.S. stock story, and that is used as a contrary rationale for the continued ascent of the indexes (the "wall of worry" etc.), why isn't the outlook for copper on the upswing as well? Could it be that the general pessimism regarding the stock market is deeper that just the speculative exuberance that characterized the markets of the early and mid 2000's? Are the rank and file of the world concerned over more mundane things like food, shelter and saving for the future?

And "everybody" thinks we are in for an inflationary trend as well. Myself included. But it doesn't seem to be happening, except in the paper asset markets. Will everybody be wrong? Everybody is usually wrong before they are right!

I just notice a weakness in the copper market that may be more than just speculative excess unwinding.

macro thinking,
gh

U.S. $

The recent rally in the US Dollar index/UUP etf may have been covering by dollar shorts as well as selling by Yen holders in anticipation of the devaluation of the yen. Now those US dollars are being used to buy U.S. goods. Mostly financial goods. Stocks and bonds. Hence the rise in the stock market and the continued strength in the bond markets; from government to junk bonds.
But as those U.S. dollars are invested in this country then they are here and will start to circulate. This is the endgame that Bernanke and the interest rate doves and stimulus crowd were after. To get some of the U.S. dollars in the world to come home to roost.
Now the U.S. dollar should start the decline as those dollars are worked into circulation in this country.
"Inflation is always and everywhere an monetary phenomenon". as Mr. Freidman famously said.

I wonder if this might be what Goldman sees coming.....

Perhaps i am too brash.

gh

On debt

 

 

I found this to be an interesting article by M. Hudson

 

 

 

 

Government Debt and Deficits Are Not the Problem. Private Debt Is.

 

 

March 12, 2013

By Michael

There are two quite different perspectives in the set of speeches at this conference. Many on our morning panels – Steve Keen, William Greider, and earlier Yves Smith and Robert Kuttner – have warned about the economy being strapped by debt. The debt we are talking about is private-sector debt. But most officials this afternoon focus on government debt and budget deficits as the problem – especially social spending such as Social Security, not bailouts to the banks and Federal Reserve credit to re-inflate prices for real estate, stocks and bonds.

CNBC as a contrary indicator

I always have CNBC on when I'm sitting in front of the trading screen. Over the years I have noticed that, like most news services, they are not timely. By the time they are reporting a move the move is over or nearly over. And if they say it is time to buy it is probably time to sell.

Today the talk is of the gold market. Goldman Sachs came out with a "Sell" on gold. (Why would GS tell us to sell gold short? A: because they have their short positions in place.) As CNBC is talking about gold, GLD sells off. In the past when I see a market move as it is being talked about I know the CNBC watchers are making their move.  And those who trade on the news are usually wrong.

On the weekly chart gold is sitting on a floor. If the floor breaks the price could fall. BUT, how far. With Goldman short?I wonder when they will cover.

CNBC is a contrary indicator. Time will tell if that indicator has worth this time....

gh

Decline and Fall?

Will the US dollar continue the weakness that has been the trend over the last several years?
And what will the price of gold and silver do if the downtrend in the reserve currency of the world continues?
Japan is intent on the devaluation of THEIR currency. It seems that the US Federal Reserve is intent on the same thing. Japan got the short end of the stick over the last two decades as the rest of asia devalued and took marketshare from Japan. Ditto for this sleeping country. (U.S.)

Now we seem to be in the currency war. The race to the bottom is underway in earnest. What will happen to the fiat currencies? Is there an "adult" in the world to oversee the relative value of each currency. Where is the bond market? Answer: it has been taken over by the same central banks!

No one is driving the bus.....

I get the feeling we are on the cusp of a good old fashioned inflationary rally in commodities and PM's.

Wishful thinking? Maybe. Timing is everything. It is not a question of IF, but WHEN....

The chart of UUP, the US dollar index shows a very long term downtrend. It also shows a proclivity for rounding tops. We appear to be in a rounding top now. It remains to be seen if the long term downtrend continues.

gh

new breakout/ GMED

Here is a good looking chart.

Globus Medical making recent new highs today as it breaks out on what looks to be increased volume.

So far, so good....

the chart:

Control your risk,
gh

Weak stocks

The unemployment numbers dissappointed this morning:Bummer!

And the latest out of Japan, who have been struggling for 20 years to gain some inflation.

Soros on Japan

The Japan story has the potential to cause huge disruption is it goes awry. Stay tuned.....


Meanwhile things look rather bearish all of a sudden.... Who will buy this dip?

Not me.

gh

Case in point

gh

Stocks weak

It has been quite a while since I've seen a good looking trading chart.

The stock market is getting aimless and there seems to be some distribution going on.

It is always difficult to tell when the indexes will top out, and for how long.

But, I think I hear Wynona.....

Waiting for the next shoe.....

gh

Weak Dollar policy?

Minneapolis Fed president Kocherlakota made a speech today. Among notable statements was "monetary policy is currently not accommodative enough".

He advocates a more active Federal Reserve in monetary policy. To me this means a "weak dollar policy".

If this idea gains traction it would mean the weak dollar as an economic tool coming out of the closet.
Silver got some traction shortly after this new was released....
The news here at Bloomberg.

gh