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

To: ild who wrote (63917)	6/16/2006 1:36:30 PM
From: ild	Read Replies (1) \| Respond to of 110194

Date: Fri Jun 16 2006 12:18 trotsky (frustrated@current account) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved there's no need to worry about the current account deficit. the coming depression should take care of it. as we will see, a shrinking trade deficit is likely to be cited as bullish evidence all the way down to Zool. Date: Fri Jun 16 2006 12:02 trotsky (Pop-eye@China and commodities) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved calm down - it's not me who's saying that China is tightening monetary policy - the Bank of China itself is saying so. i qualified that right away with an 'if it's true' statement, since LAST time, they tightened a little bit, and then immediately reversed that policy and allowed a 28% jump in year-on-year money supply growth to take place. if they ARE serious this time around, it will remove some marginal demand from commodities, as a fixed exchange rate coupled with huge monetary pumping are a big incentive for such demand. looking at copper as a proxy for the base metals bubble, from November 2001 to its recent high it had gained about 430% - more than twice as much than the record achieved in what previously had been the biggest copper rally ever ( +170% from 1949-1956 ) . it's probably fair to assume that a tad more than just present demand was reflected in that recent high price ( i.e. it certainly also reflected lofty expectations about the future ) . even if the secular bull market has further to go, a large mid cycle correction could easily be spawned by the recent central bank hawkishness - i refer you to the 1970's bull as an example ( where the metals suffered mid cycle corrections of 50% and more ) .