Time to look again at copper

The case for copper: A port in the coming storm

MidasLetter | September 13, 2016 | Last Updated: Sep 13 12:20 PM ET

While monetary metals prices ping pong back and forth between $1,320 and $1,370 in the dying gasps of futures market mal-regulation, it is worth considering the future supply and demand metrics for that most electric of metals — copper. While I’m sure you may have heard the banging on the drum by various mining promoters in support of the idea of a return to copper prices above US$4 a pound, the reality is that the metals rally that has put both gold and silver back into favour with investors has yet to do so for copper.

The next year is likely to see an exponential amplification of negative-yielding (or I should say money-losing) sovereign debt. There is also a newer phenomenon of private non-financial issuers selling negative-yielding, money losing debt. It is also quite certain that world economic growth will suffer downward revisions, which will catalyze an expansion of quantitative easing.

In that the globalized financial system knows no borders when it comes to the flows of investment capital, the expanded leverage of bank balance sheets that quantitative easing engenders is the explanation for why stock markets are flying while the economy is on its knees.

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