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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: gregor_us who wrote (4375)	4/15/2004 7:33:46 AM
From: russwinter	Read Replies (1) \| Respond to of 116555

<I'm getting the impression even the veterans are clueless about what happens next. > The "playbook" on this appears to believe that all this commodity inflation is merely USD related, and thus has been put to rest by this USD rally. There are several major flaws to this: 1. The USD strength is not sustainable as long as we run trillion buck twin deficits, and maintain sub two percent interest rates. The economic strength that accounts for the temporary pop in the USD is artificial and hyper-stimulus induced. Once the heroin wears off (and it shouldn't be long), the patient (and USD) will be in real pain. <secret supply upturn> Well put! 2. There is a monster physical shortage factor that is getting worse by the day (), especially in metals (focus on been mostly on gasoline). As the scant stockpiles get run down towards zero in the next several months (or even weeks)I wonder how the geniuses who run these playbooks wil react then? () Yesterday's combined LME and Comex in copper was 362,813 MT, down a whopping 6,882 in one day. That's sixty days left at 6000 a day. There are no real signs of a slow-down whatsoever. FCX releases on Tuesday, April 20th, and I think the market is already discounting Grasberg at full production in May or June. Watch out if it's delayed.