- Joined
- 13 February 2006
- Posts
- 5,267
- Reactions
- 12,127
The physical supply issues remain:
The leverage within the system is such that (if, when) physical inventory declines to a critical point, the paper positions will accelerate to the upside potentially causing a concomitant run on the physical. Same as a bank run on the fractional reserve system
The breakdown of the USD within the oil market is draining physical in any case. The game is over. This variable still has a year or two to play out as China is in no rush to collapse the USD yet.
Add the current treasury market (it's not actually a bank issue) crisis to the mix and this variable could speed up events significantly.
jog on
duc
The leverage within the system is such that (if, when) physical inventory declines to a critical point, the paper positions will accelerate to the upside potentially causing a concomitant run on the physical. Same as a bank run on the fractional reserve system
The breakdown of the USD within the oil market is draining physical in any case. The game is over. This variable still has a year or two to play out as China is in no rush to collapse the USD yet.
Add the current treasury market (it's not actually a bank issue) crisis to the mix and this variable could speed up events significantly.
jog on
duc