Dr. Copper vs Dr. Yellen

[errolanderson]

Next week, the U.S. Federal Reserve intends on beginning a series of rate hikes in an effort to 'normalize' rates like the good ol days.

This will occur at a time when global economies are clearly cooling, including the U.S. itself.

In the commodity world, Dr. Copper is certainly in-disagreement with Dr. Yellen's economic recovery.

Copper prices, a true reflection of global economic health are down 55%, crude oil prices have crushed 65% lower over the past 1 1/2 years. Global interest rates are falling as global deflation takes hold and investors rush toward the safe-haven U.S. dollar powering the American buck 25% higher.

Next week will be a huge. This is a big test. The U.S. Fed is gambling on a rate hike that will not harm the U.S. recovery. This would prove the American economy is more powerful than any fallout in global commodity markets.

Dr. Copper is about to teach Dr. Yellen a lesson in global economics (IMO).

[furrowtickler]

I think your right , I will have a Dr Pepper and Captin Morgan and think about it more

[vvalk]

No expert here but my understanding is that copper is not the benchmark it used to be. I disagree with you on the U.S. Economy cooling. Everything I see seems to show their economy doing quite well. Remember they do not import nearly as much as they use to and can self sustain themselves far better then other countries can

[Nudge]

All of this is known by the market. USD will fall, oil will bottom, CDN will turn higher, as will many other commodities. Opposite reaction of what all the pundits expect.

[biglentil]

u got it Nudge

[farming101]

Always darkest before the dawn?
What's your timeline Nudge?
What will start this turnaround?

[Hopalong]

Just been looking at commodity futures prices.
Pretty flat except oil and natural gas where outlook is fifty per cent increase in price over five years.
Dow and S and P stock indexes predicted to decline ten or fifteen per cent in next couple of years.
Hard to explain anamoly of oil and natural gas with other commodities but this seems to be where speculators put their money.

[errolanderson]

Hopalong . . . take a look at coal, iron ore, nickel, gold, silver, live and feeder cattle , coffee, sugar, corn, soybeans, wheat, ocean freight rates . . . in addition to the king of commodity markets 'crude oil' The list goes on. This is a broad based global deflationary washout in-progress.

It takes no prisoners, including the U.S. economy.
Fallout this week has now triggered dissent within U.S. Fed governors heading into next week's policy meeting.

[Nudge]

Short covering will start it
Money flow will take it far enough to turn some charts
Next week.

[ajl]

Commodities will rise again but is it next week or 30 yrs from now? A token 25 basis point rise in US interest will not be noticed in the US as their economy is not in that bad of shape. They are not as export dependent as the rest of us.

[farming101]

Thanks Nudge.
Short covering could happen in wheat if it gets a chance.
Right now the drop in the USD looks like it is being treated as a buying opportunity.
CAD and Crude oil -brutal.
Canola futures still holding its own.
Will be watching with interest next week.

[errolanderson]

U.S. jobless claims now at a 5-month high (released this morning).

The U.S. economy is slowing . . . .