Remember, it’s a market of commodities, not a commodities market

That phrase usually pertains to stocks as before all stocks were correlated at 1, they used to actually trade in somewhat uncorrelated fashion, with some going up, some going down and some going up or down faster than the market…

We’ve gotten used to commodities all rising and falling together in recent years as aggressive use of novel forms of monetary easing has captured the imagination of those who prefer physical goods as an inflation hedge over paper securities.

The only commodity playing the inflation game today is gold (and it’s little brother silver). Pretty much everything else is getting belted on the back of clear evidence of a sharp deceleration in global growth.

Inflation looks to be light years away is slack in the global economy and scant demand for money keep all that extra liquidity holed up in the world’s central banks.

Oil and copper eventually get consumed. They are falling like rocks. Gold moves from one portfolio to another. I think oil and copper are telling us more about the world than gold.

5 Comments

  1. who in this forum feels like he can buy more and more for the same buck year by year?
    All the deflation talk central bankers are suggesting is bullcrap. They do it because they need inflation to facilitate the burning down of the massive debts they comrade politicians have accumulated. Contrary to schoolbook definitions of inflation its appearance is much more complex. It is coming and it is coming big.

  2. And its been coming for 5 years…I’m frankly getting a little tired of waiting.

  3. It didn’t happen in US but it certainly happened here in Asia though… :(

  4. This site is by far and away the best education a novice could hope for.
    And never loose the humor :)

  5. Your for sharing you ideas really helps me to work easily. Thanks for providing such important information. :)

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