Strictly: Drilling II Message Board

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Strategies & Market Trends : Strictly: Drilling II

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To: isopatch who wrote (2205)	9/27/2001 8:54:11 AM
From: MetalTrader	Read Replies (1) of 36161

iso, I'm not sure everything has changed. What has changed is the velocity of change. As I watched the action on PD yesterday, it's clear that there are two divergent investment theses at work. What I suspect is that only the variable of time separates the two. Clearly a deflationary cycle can play havoc with industrial metals. Both consumption and forward pricing will dry up and metals go into backwardation with no incentive to buy/price more than the bare minimum. Consumers will want consignment terms that don't price in some cases until after consumption. A generally lousy situation for an industry which will be followe by production cutbacks. But, the question I ask is will the cure be worse than the illness. Greenspans suggestion that a 100 billion fiscal stimulus package be considered is nothin' if it ain't inflationary. For this pillar of the Whip Inflation Now community to suggest such makes me think that inside Alan's restrained exterior lies a wild eyed scared shitless kinda guy. When that happens, you'll have a fiscally stimulated demand with an increasing contango. I'd be watching those spreads for clues on metals investments. mt

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