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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Claude Cormier who wrote (8709)	2/26/2004 12:38:42 PM
From: russwinter	Read Replies (3) \| Respond to of 110194

Claude, as I stated in my Train Wreck essay, virtually every key commodity you could track is at some decade or multi-decade low. Secondly demand is just eating up what's left. Thirdly, the world is just one major (or minor) geopolitical event away from running completely out of something important. It can't be solved on the supply side in the near term (over next year or two), so it has to hit on the demand side. There is no evidence these players can manage their affairs. There's been talk about China "cooling things down". Yeah sure, regulate the behavior of 1.3 billion folks there, and 250 million crazy American consumers with blank checks drawn on their housing. So cooling down isn't going to happen unless the US gets on board in an aggressive way. Since that's now appears impossible, they will just plain run out of input goods and commodities. Looking at your forte, metals, today I see today that nickel inventories are at 13,548 tonnes, that's about six days supply above ground. metalprices.com So far mines have been able to barely keep it there, but it's now slipping. Both Korea and China removed their tariffs last week, essentially signaling, "go get the last six days worth". Since then inventory slipped 1,000 tonnes. And China has brought on line another one million tonnes of stainless steel production they are trying to feed. There is more copper around still, but you know the Grasberg story. Biggest copper mine in the world down on about 30% of production. They "hope" to be restored by June. Meanwhile here's what the drawdown looks like in just the last week, first number is LME, second Comex. Shanghai and Singapore are currently zero.: 2-17: 316,225 + 252,128 = 568,353 2-18 313,000 + 250,496 = 563,496 2-19 308,750 + 249,168 = 557, 918 2-20 303,325 + 248, 099 = 551,424 2-23 298,400 + 246,538 = 544,928 2-24 294,725 + 245,678 = 540,403 2-25 291,800 + 244,314 = 536,144. This may seem just "low", but I haven't seen a single up day on inventory since last June. It's just been day after day of minus 4,000 to 6,000. Tick, tick, boom! It's been getting worse too, no wonder Pierre Lassonde said the planet won't have a pound of copper above ground by May. It's obvious what he's looking at. We could do the same analysis for less important metals like tin, silver etc.