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Strategies & Market Trends : Commodities - The Coming Bull Market
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To: Victor Lazlo who wrote (672)8/10/2001 9:46:41 AM
From: Robert Douglas  Read Replies (2) of 1643
 
in a worldwide economic slowdown, only niave blind hope thinks that commodities will go
up.

Just like a strong economy can pave the way for lower prices by increasing production, a slowdown can sow the seeds of higher prices by eliminating it.

Take copper for instance. The present low prices will shutter high-cost production, some of it permanently. It will also put a damper on future production increases. When demand does increase, there will be insufficient capacity to meet it. Then you will get the rise in price necessary to call forth more supply.

I believe that many commodities will experience this shortage as the world economy enters its next growth phase. This growth will be led by developing economies who will consume large amounts of these short-supply commodities.
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