Commodities tipped to collapse

hmmmm, i think we need to back that one up with major brokerage house upgrade....Dom Sec just doesn't cut it for me.

Cheers,

CanAussie - I was under the impression Georgie Boy is on his last term now. I think It'll be someone else next time no matter which mob of jokers wins.
Can anyone confirm??
-dukey

BSD said:

Are they saying the Fed/Govt are propping-up equity markets?

In my view, nobody (no matter how leveraged) could manipulate the US equity markets for very long.

The 'buyers from Mars' could buy futures all they want; but if the physical doesn't catch-up they will quickly run out of ammo against the arbs.

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They don't have to do it for long... just long enough to affect sentiment.

BSD said:

I haven't seen too much negativity about the employment number.

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You're not looking in the right places.

Here is a good blog to keep an eye on http://bigpicture.typepad.com/

Dukey said:

CanAussie - I was under the impression Georgie Boy is on his last term now. I think It'll be someone else next time no matter which mob of jokers wins.
Can anyone confirm??
-dukey

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Same mob though right. I really think the ultra conservatives in the US have had thier time.

Cheers,

CanOz said:

Same mob though right. I really think the ultra conservatives in the US have had thier time.

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mmm...and whats the odds on a return of Hillary and Bill? I'd like to see it just for the sheer historical novelty.

Not that this is relevant to the thread!!

moses said:

mmm...and whats the odds on a return of Hillary and Bill? I'd like to see it just for the sheer historical novelty.

Not that this is relevant to the thread!!

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Yep they're quite a laugh the Americans, past President couldn't say no! and the current President can't spell no! .

They haven't had much luck with the Guys, maybe its time for a sex change, I mean at least she's got half a brain.

wayneL said:

You're not looking in the right places.

Here is a good blog to keep an eye on http://bigpicture.typepad.com/

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From Barry http://bigpicture.typepad.com/comments/2006/12/what_is_the_tru.html

Not about employment numbers, but highlights the dishonesty of financial reporting

What effect would a dollar crisis have on commodities?

Precious metal boomage is the intuitive answer. But markets tend to do the opposite to what *everybody expects.

What about base metals? They might go up in US dollars, but what about in Pacific pesos?

Check out this video on dollar doom:

http://avalontrading.blogspot.com/2006/12/death-of-dollar.html

Freeballinginawetsuit said:

Yep they're quite a laugh the Americans, past President couldn't say no! and the current President can't spell no! .

They haven't had much luck with the Guys, maybe its time for a sex change, I mean at least she's got half a brain.

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Oh god, NO!!!

I rate Bill Clinton very highly, the best since JFK I'd think.

I'm also not that disapointed with George W, although that is frightfully unfashionable to say of course, I do not think he has done a bad job, I wonder how JFK for instance would have reacted after Sept 11. What would Maggie Thatcher or Winston Churchill or John Howard have done?

Bush is no intellectual, but you will find intellectual's are not usually great leaders.

Bush has done an adequate job IMHO. He cops too much for what is an impossible job. If he had done nothing after Sept 11 he'd cop all sorts of criticism, if he does something he cops criticism, he can't win.

And finally, Al Gore is a ********!!

wayneL said:

What effect would a dollar crisis have on commodities?

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Good question.

But what maybe more important is....


What effect would a soaring yuan have on commodities?


Once China fairly values their currency it will soar, they are deliberately undervaluing it quite significantly at the moment for obvious reasons - cheap t-shirts to stock $2 shops all around Australia.

Realist said:

Bush has done an adequate job IMHO.

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I thought you were a value investor Realist.

This comment puts you in the 'I have no brain' basket! Please redeem yourself. Somehow.

Realist said:

Oh god, NO!!!

I rate Bill Clinton very highly, the best since JFK I'd think.

I'm also not that disapointed with George W, although that is frightfully unfashionable to say of course, I do not think he has done a bad job, I wonder how JFK for instance would have reacted after Sept 11. What would Maggie Thatcher or Winston Churchill or John Howard have done?

Bush is no intellectual, but you will find intellectual's are not usually great leaders.

Bush has done an adequate job IMHO. He cops too much for what is an impossible job. If he had done nothing after Sept 11 he'd cop all sorts of criticism, if he does something he cops criticism, he can't win.

And finally, Al Gore is a ********!!

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Yep,

I certainly would rate Clinton highly, the sad point is that he will always be remembered for.............ML. Unfairly, perhaps, I mean for an old fella he showed extraordinary constrant to stop at just some throat action, most would have gone the whole hog with a carrot dangling in front. Not Bill though, best leave no evidence behind he was probably thinking (and I can always sack her if need be!) thinking he was the smart one. I would love to have been a fly on the wall when she said " Ahhh Bill but I kept the dress you so kindly dumped on", the poor bugger was stuffed then, a real conundrum .

JFK was definately a man for the times and he had better taste than Clinton and didn't get caught, or had better minders .

As for Bush he's an absolute shocker. An unintellegent, misinformed, indecisive fool who resorts to threats and warmongering and preys on the week (who seem to follow his idiocy). Whats with the american public!, they have been in no hurry to get rid of him
No way did bush act decisively after 9/11, he was at a loss what to do and flew around in circles for a couple of hours. It probably took 3 hours for his minders to drum in his 'dum dum' lines and feel that he could talk in public without dribbling.

5 years later, Afghanistan is still going on, Iraq's still going on and OBL is blowing in the wind having a fat old time. The US would have been a lot better just bying their time and getting him overtly when he popped his caftan up when he thought he was safe, they jumped the gun and went off half cocked to early.

I came across something the other day whilst in KAL that mentioned a mining pioneer in that neck of the woods that went on to become a US president, I bet he would have been well grounded.

Of all the world leaders, my fav's old Winnie, now he was a man for the times who left his predessor in his shadows. The world would be a much different place if it wasn't for him and his ability to drum up a Nations support (and the rest of the world) at such a crucial time for mankind. Without him Hitler would have been running amok, inviting the King for tea and laughing at the Americans with 'too little>too late' and nowhere to land.

Freeballinginawetsuit said:

As for Bush he's an absolute shocker. An unintellegent, misinformed, indecisive fool who resorts to threats and warmongering and preys on the week (who seem to follow his idiocy). Whats with the american public!, they have been in no hurry to get rid of him
No way did bush act decisively after 9/11, he was at a loss what to do and flew around in circles for a couple of hours. It probably took 3 hours for his minders to drum in his 'dum dum' lines and feel that he could talk in public without dribbling.

5 years later, Afghanistan is still going on, Iraq's still going on and OBL is blowing in the wind having a fat old time. The US would have been a lot better just bying their time and getting him overtly when he popped his caftan up when he thought he was safe, they jumped the gun and went off half cocked to early.

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Agree that Bush is a clown.
But when you are in a group of people, normally you pick the smartest person to become the leader. The Americans picked Bush. Tells you something about Americans ! :

Freeballinginawetsuit said:

They haven't had much luck with the Guys, maybe its time for a sex change, I mean at least she's got half a brain.

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Hilary may have the brain, but Bill's got the head.

ABARE Releases Prophecies For 2007
FN Arena News - December 18 2006

By Rudi Filapek-Vandyck

The Australian Bureau of Agricultural and Resource Economics (ABARE) has just published its outlook for 2007. As expected the Canberra based, government owned economic researchers and forecasters anticipate rather smooth sailing for most of the world economies predicting global economic growth will only fall a little from this year's anticipated 4.8% to 4.3%. Inflation is expected to remain contained.

One of the surprise predictions is that the US dollar is expected to depreciate a tiny little bit only against the euro in the year ahead: from an average 0.80 euro to 0.78 euro. The Australian dollar is expected to remain largely unchanged versus the USD: 0.76 for 2007 versus 0.75 for 2006. (An explanatory paragraph further down in the document suggests the forecast is for the first six months of 2007 only (year 2006/07) with ABARE playing it safe by adding the outlook for the currency currently comes with "considerable uncertainty").

The forecast for gold is more buoyant with ABARE forecasting an average spot price gain of 11% in 2007 predominantly fuelled by increased investor demand for the precious metal. The forecast is for the gold price to average US$670 an ounce in 2007 versus an estimated 2006 average gold price of US$606 an ounce.

Another stand out prediction is that prices for crude oil are forecast to average around US$56 a barrel in 2007. This is circa 15% lower than the estimated average of US$66 a barrel in 2006 as ABARE believes production will increase faster than demand and lead to a further build-up in global inventories.

World steel prices, however, are expected to fall only marginally in 2007 from the historically elevated levels in 2006. ABARE cites robust economic growth in China, India and other developing Asian economies in combination with solid economic growth in Japan and the US in 2007 as factors underpinning this forecast.

Australian economic growth is forecast to fall to 2.5% from 2.9% this year, while growth in the US is expected to fall to 2.5% from 3.3% this year. The Bureau does highlight there are still "considerable risks" with regards to the US economic outlook, specifically with regards to "build-in inflation" which could endanger the economic picture in 2007. Notes ABARE: "a marked weakening of economic growth in that country [the US] would pose a threat to economic prospects elsewhere in the world".

Economic growth in China is expected to continue its robust path: 9.5% in 2007 against 10.4% in 2006.

The worst drought in a long time in Australia is estimated to reduce the rate of economic growth in 2006-07 by around 0.7 percentage points from what would otherwise have been achieved. The local inflation rate is assumed to be around 3.0% in 2006-07, compared with 3.2% in 2005-06.

Earnings from Australia's commodity exports are forecast to be around $139.9bn in 2006-07, compared with $123.5bn in 2005-06, or a rise of circa 13%. ABARE explains the forecast increase in the value of commodity exports reflects "significantly higher earnings from mineral resources exports".

Export earnings of farm commodities are forecast to be around $25.4bn in 2006-07, 8% below the $27.6bn recorded in 2005-06. No surprise here as the fall in farm export earnings "mainly reflects lower export volumes for crops as a result of the drought".

Interestingly, ABARE forecasts world wheat production in 2006-07 is estimated to be 31m tonnes lower than in the previous season. As a direct result of this, the world wheat indicator price is forecast to increase by US$32 a tonne in 2006-07 to average US$208/tonne. The pool return for Australian premium white wheat (APW 10) is forecast to be A$248 a tonne in 2006-07, 30% higher than in the 2005-06 season.

The world indicator price for traded raw sugar is forecast to fall by 25% to average US11.9 cents a kilogram (New York no.11 fob Caribbean) in 2006-07. The price fall follows a global supply response to high prices in the middle of 2005-06 which has caused sugar supply to grow faster than sugar demand, the researchers note.

The value of Australia's minerals and energy exports is forecast to be around $110.7bn in 2006-07. This compares with $92.2 bn in 2005-06. Energy commodities export earnings are forecast to increase from $39.3bn in 2005-06 to $41.3 bn in 2006-07. Export earnings for metals and other minerals are forecast to rise by 31% to $69.3bn in 2006-07.

The price for aluminium is forecast to fall by 11% to average US$2260/tonne (US103c/lb) as global aluminium production is forecast to exceed consumption. The price fall for aluminium should beat copper's with ABARE forecasting a fall of more than 8% to an average of US$6250/tonne copper (US284c/lb) for the year ahead.

For nickel and zinc the price outlook should remain positive still with nickel's average price anticipated to increase by circa 3% to US$24,800/ tonne in 2007 while zinc prices are forecast to rise by circa 30% to average US$4200/tonne or US192c/lb.

ABARE notes in "real terms" (which means adjusted for inflation) nickel's price should come close to its all time high of 1988.

Freeballinginawetsuit said:

Of all the world leaders, my fav's old Winnie, now he was a man for the times who left his predessor in his shadows. The world would be a much different place if it wasn't for him and his ability to drum up a Nations support (and the rest of the world) at such a crucial time for mankind. Without him Hitler would have been running amok, inviting the King for tea and laughing at the Americans with 'too little>too late' and nowhere to land.

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Don't forget that this is the bloke that done his apprenticeship as boss of the Galipoli campaign, caused thousands upon thousands of unneccessary deaths and came up smelling of roses later on in WW2. Was the price worth it?

Here's another prospective scenario for commodities from an Australian sourced disruption to supply. What I'm hearing is that there is trouble ahead for the states electricity generators through lack of cooling water. For this particular area of the state, there is at best 7 months of cooling water left. Without SUBSTANTIAL rainfall there is the prospect of power rationing (as well as the current water restrictions). Now as the Eastern states are (loosely) interconnected, any disruption in one state adversely affects the other states (subject to the interconnector(s) capacity restraints). There is the real possibility that any mining operations connected to the grid will experience electricity supply interruptions.
I would envisage this would reduce somewhat the output of these mines, and hence have some affect on prices?.
How many mines are run on diesel generators? How many on grid power?. As well as the current restrictions on exporting capacity, miners would also have to deal with power blackouts. This could cause a further appreciation in commodity prices, while Australian producers would have to sit on the sidelines unable to produce.

The effect of climate change on the world economy

If this were to be the scenario that unfolds, power & water shortages could spread the current rural recession to the wider community in which case there would be less demand for raw materials.

If it doesn't rain soon then this will be a very real danger.

Who knows, just another angle maybe????

PS buy a generator while you can

blueroo said:

Don't forget that this is the bloke that done his apprenticeship as boss of the Galipoli campaign, caused thousands upon thousands of unneccessary deaths and came up smelling of roses later on in WW2. Was the price worth it?

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Not true.

He was an Admiral, not a General.

He was instrumental in trying to get rid of Haig. He also forced the BEF to increase the ratio of machine guns to infatrymen, (despite Haig's objection) even though he was an Admiral and had only the lives of British soldiers on his mind. If you had read British Butchers and Bunglers of World War One you might know a bit more. Churchill was at the time, one of the very few leaders who actually cared about the men he was leading.

Another view of the direction of commodities prices -

Read the story

Dr Doom said:

Another view of the direction of commodities prices -

Read the story

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the Bloomberg Article said:

``Copper is going to come a cropper,'' Moore said.

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LOL I like that one