Dr Copper still flashing warning signals
Copper closed down 1% today to $5115 per tonne in London today, which was the lowest since July 2009.
By now the catalysts are obvious. There are oversupply due to huge investments over the past 10 years and emerging markets are slowing. About 17 per cent of the copper industry is under water at current prices, according to an analysis by Macquarie cited by the FT.
The real question is: With all the caution on the global economy and the US dollar dragging on growth, why is the Fed talking about hiking?
The answer is that the Fed is using old models that use current domestic growth to forecast future domestic growth. But in 2015, global growth is more important than ever and it's what will determine the shape of the US economy in a year or two.
