Honestly, I'm not sure what his point is except maybe that some margin traders are getting
into an increasingly risky market in commodities? I think that's a generally accepted tenet. It's often
a game of chicken at the highest levels with huge margin buyers seeing who can wait the longest
and make the most, before someone bails and the prices drop suddenly when someone pulls
the trigger on a huge sell.
I still believe basic commodities are wealth providing there's a market for them. Canada is a
commodities based/driven market. As long as there's a demand somewhere, we're OK. If there
isn't, we're still OK, because economies tend to be cyclical and eventually when they next improve,
based on their own internal drivers, the demand for our stuff will come back.
The US (which I believe he was talking about, reference his gas price numbers) isn't necessarily
commodity driven as much as we are except food and eventually natural gas, when oil declines
as a worldwide energy source. They could be a bigger oil producer, but politics is making that
difficult for them right now. Also, his examples of charts may be sort of related to the Greeks
considering dropping the Euro as their currency, which has caused a run on US$ over the last couple
of days driving some things like oil and gold lower as the US$ strengthens as people historically
buy them for safety (why?) when another currency is threatened. Copper might just be trending
lower based on a slowing Chinese economy which is supposed to be artificially slowed by their
government now that they finally "get" that too much inflation is counter productive.
I'm surprised he didn't note the drop in silver and the rise in gas and oil stockpiles due to a 4th
consecutive week of reduced demand for both in the US and elsewhere. I know I'm driving less.