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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Fiscally Conservative who wrote (187400)	12/22/2014 4:25:44 PM
From: JimisJim	4 Recommendations Recommended By CommanderCricket elmatador Fiscally Conservative isopatch Read Replies (2) \| Respond to of 206093

In a sense, US$ has become the "commodity" of choice in a world flush with them... almost all other currencies are *perceived* to be risky at the moment... and as always, perception (right or wrong) is reality in the market place. If the washout in "hard" commodities continues, and much of the developed world slips into deflation (even temporary, short term), then the US$ will continue to soar. It would be interesting to view a graph of the price of oil overlaid on the US$ -- I would not be surprised to see an almost 1:1 reverse correlation.

To: Fiscally Conservative who wrote (187400)	12/22/2014 4:52:49 PM
From: isopatch	Respond to of 206093

Sorry to say, have only enough time to pass the buck AFA your question is concerned. Anybody out there want to help <Entitlement> understand how various economic factors combine to create the major LT commodity index price declines (per the 7 yr chart in my earlier post) which he says <make no sense> to him? TIA Iso

To: Fiscally Conservative who wrote (187400)	12/22/2014 5:42:27 PM
From: robert b furman	Read Replies (1) \| Respond to of 206093

The first thing that happened after QE 1 was a spike up incommodities. As we phase out QE 4 - I suspect that the other QE's are expected to be phased out. The unwinding of the QE naturally should unwind the commodity boom that it created. That and the big banks are no longer in the commoddity biz. Bob

To: Fiscally Conservative who wrote (187400)	12/22/2014 8:34:52 PM
From: Elroy Jetson	Respond to of 206093

Where do you keep your surplus natural gas or wheat, after you buy a bunch because it's selling at a discount price? My garage is only so big. The price of commodities depend almost exclusively on current demand, which was big when China was on a buying spree - but now they're not. Shoes are pretty inexpensive right now, so use your excess liquidity to buy yourself 200 pairs.

To: Fiscally Conservative who wrote (187400)	12/30/2014 2:05:05 PM
From: Biomaven	Read Replies (4) \| Respond to of 206093

>>With the world flush with liquidity via currency cash why are world wide commodities falling. My own (partial) explanation is that the very low interest rates and easy money that have prevailed for the last several years have enabled commodity suppliers to ramp-up supply faster than demand. Certainly the oil weakness is primarily supply-driven rather than demand-driven. I'd also add efficiencies on the demand side. Look at the automotive industry for example. There is a lot less steel in a car than there used to be, and much of that steel is now recycled via mini-mills instead of being new production. The average fuel economy of new cars is now over 25 MPG. Some part of the weak commodity prices also simply reflect the strong dollar. The final piece of the explanation is that the Chinese rate of growth was unsustainable. As that has now slacked off some, they can no longer make up for weak demand in the rest of the world.