Copper, the Metal with a Ph.D. in Economics
BY BILL BONNER - 08/02/2010
The bust in the economy ain't so bad either. Credit default swap spreads are widening. Bond yields are rising...especially in Europe.
The service sector in the US is performing below expectations.
Oh...and listen to this:
"More weigh walking away from mortgages," says The New York Times. As anticipated, people are warming up to the idea of stiffing their mortgage lenders. Why not? Millions of houses are underwater; let the mortgage company deal with them.
Delinquent mortgage payments have risen to over 10%.
The Baltic Dry Index is dropping, too.
And Dr. Copper is 'set for catastrophe,' says a copper expert.
Copper, you'll recall, is the metal with a Ph.D. in economics. It's the metal that you find in home wiring, refrigerators, offices, automobiles, cell phones - just about everything. So, when the price of copper goes down it means something. Usually, it means business is slowing down.
Copper has fallen more than 10% in 2010. It will probably go down a lot further. Chinese companies stockpiled the metal last year, causing its price to double. Now, they've got more than enough.
And if the world economy is still slowing down, which is what the Baltic Dry Index is probably telling us, you can expect the price of copper to collapse.
Stay tuned.
Washington is waiting for a big storm. They've been talking about it on the radio all week long. More than a foot of snow is expected.
School children look forward to a holiday...not to mention sledding and snowball battles. Adults are hoping for a little time off too...but dreading the drive home from work.
Here at The Daily Reckoning, we can't help ourselves; we look at it like the onset of a bear market...or a depression. It's going to be rough. They'll be some wrecks along the highway. Some people will get stuck. Some will get hit by snowballs or slip on the sidewalk.
See, it's going to be fun!
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