China Commodity Bubble Bursts As Exchanges Curb Goldman’s “Biggest Concern”

China Commodity Bubble Bursts As Exchanges Curb Goldman’s “Biggest Concern”:

During the last week we have highlighted the frightening similarity between the speculative spike in China commodity trading (which has sent industrial metals prices soaring in yet another ‘error’ signal for real supply and demand) and the pump-n-dump in Chinese stocks. Specifically, as Goldman warns the factor that “concerns us the most is the increased speculation in the Chinese iron ore futures market,” and now, as Bloomberg reports, it appears that bubble is bursting as Steel and Iron Ore prices tumble most in 21 months after Chinese exchanges raise margins in an attempt to curb speculation.

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Commodity Trader: “What Is Happening Has Absolutely No “Reasonable” Explanation”

Commodity Trader: “What Is Happening Has Absolutely No “Reasonable” Explanation”:

One commodity trader writes in with some very unique observations. From trader “Peter”

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The insanity has now fully spilled into the commodity markets – a market which I professionally made a transition to after the 2008 crisis from the financial markets, simply because I believed it was a market that would still function according to true fundamentals…

I guess that only lasted so long…

Read moreCommodity Trader: “What Is Happening Has Absolutely No “Reasonable” Explanation”

Bloomberg Commodity Index Crashes To 16-Year Low – 22% Below 2009 Trough

This will surely end ‘well’!!!


Bloomberg Commodity Index Crashes To 16-Year Low – 22% Below 2009 Trough:

Commodity prices have not been this low since early 1999 (and are 22% below the trough in 2009).

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The last time commodities were collapsing like this as stocks were soaring like this… it did not end well..

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Just keep buying FANGs… they will kepp you safe, right?

Charts: Bloomberg

Marc Faber: ‘It’s A Tipping Point’ – ‘There Are No Safe Assets Anymore’ – ‘Focus On Precious Metals’

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“It’s A Tipping Point” Marc Faber Warns “There Are No Safe Assets Anymore”  (ZeroHedge, Sept 2, 2015):

Markets have “reached some kind of a tipping point,” warns Marc Faber in this brief Bloomberg TV interview. Simply put, he explains, “because of modern central banking and repeated interventions with monetary policy, in other words, with QE, all around the world by central banks – there is no safe asset anymore.” The purchasing power of money is going down, and Faber “would rather focus on precious metals because they do not depend on the industrial demand as much as base metals or industrial commodities,” as it’s now “obvious that the Chinese economy is growing at nowhere near what the Ministry of Truth is publishing.”

Faber explains more… “I have to laugh when someone like you tries to lecture me what creates prosperity”

Some key exceprts…

Read moreMarc Faber: ‘It’s A Tipping Point’ – ‘There Are No Safe Assets Anymore’ – ‘Focus On Precious Metals’

“They’ll Blame Physical Gold Holders For The Failure Of Monetary Policies” Marc Faber Explains Everything

“The future is unknown and we are not dealing with markets that are free markets anymore…now we have government interventions everywhere. [But] in the last say twelve months, I have observed an increasing number of academics who are questioning monetary policies. That’s why I think they will take the gold away and go back to some gold standard by revaluing the gold say from now $1000/oz to say $10,000 dollars. An individual should definitely own some physical gold. The bigger question is where should he store it? because… the failure of monetary policies will not be admitted by the professors that are at central banks, they will then go and blame someone else for it and then an easy target would be to blame it on people that own physical gold because – they can argue – well these are the ones that do take money out of circulation and then the velocity of money goes down – we have to take it away from them… That has happened in 1933 in the US.”

Related info:

What Gold Nationalization Really Means

Roosevelt Gold Confiscation In 1933: ‘No American Could Visit A Safe Deposit Box For Some Time Without A Government Agent Accompanying Him’

On This Day In 1933

The Day The Government Seized Americans’ Gold – April 5th 1933


marc-faber
Dr Marc Faber was born in Zurich, Switzerland. He studied Economics at the University of Zurich and, at the age of 24, obtained a PhD in Economics magna cum laude. Dr Faber publishes a widely read monthly investment newsletter “The Gloom Boom & Doom Report” report which highlights unusual investment opportunities, and is the author of several books including “ TOMORROW’S GOLD – Asia’s Age of Discovery”.

“They’ll Blame Physical Gold Holders For The Failure Of Monetary Policies” Marc Faber Explains Everything (Marcopolis, Aug 7, 2015):

Interview with Marc Faber, Editor and Publisher of “The Gloom, Boom & Doom Report’”

In this exclusive interview with Marcopolis.net Marc Faber covers it all: from commodities and China to the outlook on inflation, the Euro and gold. According to him the global economy is not healing. To the contrary, we might find ourselves back into recession within six months or a year. In that case he expects more money printing by central banks, which eventually could lead to high inflation rates and renewed strength in commodity prices.

On the bright side, he sees great economic potential in Vietnam. Also, the Iraqi stock market has good potential now that a deal with Iran has been reached. While mining stocks are extremely depressed we might see defaults before any meaningful recovery.

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In your 2002 book “Tomorrow’s gold” you identified two major investment themes: emerging markets along with commodities. That was a great call. As for commodities, they had a great run up until 2008. Then they crashed sharply along with everything else just to recover strongly into 2011. Since then they have acted weakly, and recently commodities even reached a 13-years low. Is this the end of the commodities-super-cycle, as some have claimed, or is it more like a correction?

Read more“They’ll Blame Physical Gold Holders For The Failure Of Monetary Policies” Marc Faber Explains Everything

The Commodity Crash Is “A Canary In The Coal Mine For The Global Economy”

Indeed.

And the big reset is coming.

I would protect my assets by owning physical gold and silver (outside the banking system).

This is not about short term gain, this is part of the strategy to survive the coming total financial collapse.

That said, I believe the gold bugs will be proven right and at one point, both gold and silver prices, will jump to unknown heights.


Full interview with Stephen Schork after the jump:

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Stephen Schork: The Commodity Crash Is “A Canary In The Coal Mine For The Global Economy” (ZeroHedge, Aug 8, 2015):

The best thing about the commodity crash relapse taking place so quickly after the last swoon – recall tha we have had two oil bear markets within 8 months – is that all those hollow chatterboxes and econo-tourists who swore that tumbling oil is “unambiguously good” and “great for the economy” (first and foremost Larry Kudlow and then proceeding with every single sellside strategist and economissed), have been laughed out of even CNBC’s studio, and are nowhere to be found this time around because not only did all those promises of a surge in consumer spending never materialize (for reasons, or rather one reasonwhich we explained extensively before), but the observent public still remembers all too well how countless ‘experts’ confusing cause (a gobal slowdown in the economy) with effect (crashing commodities).

Therefore, we were delighted when someone who actually understands the energy market for a change, The Schork Report’s Stephen Schork, appeared on BBG’s Pimm Fox yesterday to explain not only what the immediate future holds for both oil and gasoline prices, but why, when one actually gets cause and effect right, “this drop in oil prices, this drop industrial metal prices, this is not good. It’s a canary in the coal mine that something is not right in the global economy, and that is a concern for us all.

Read moreThe Commodity Crash Is “A Canary In The Coal Mine For The Global Economy”

‘Something Has To Give’: Wall Street Finally Noticed The Epic Divergence Between Stocks And Commodities


“Something Has To Give”: Wall Street Finally Noticed The Epic Divergence Between Stocks And Commodities (ZeroHedge, Aug 6, 2015):

We have shown the following chart, showcasing the unprecedented divergence between commodities and stocks countless times:

Bloomberg Commodity Index

And now the sellside is finally starting to notice, and instead of merely falling back on its traditional “but if you ignore energy…” platitudes aimed squarely at the 5-year-old trader market, is taking it seriously. Here is Credit Agricole’s Valentin Marinov with a note released yesterday, which it seems took the market about 24 hours to read and digest.

Stocks still up even as commodities are down – something has to give

The persistent selloff in global commodities (and commodity currencies) of late is attributed to mounting growth concerns (centred on China) as well as USDappreciation in the run up to Fed lift-off. Lower commodity prices have already sent gauges of inflation expectations lower and weighed on global bond yields.

Yet, it seems that these developments are in stark contrasts with the apparent resilience of the developed stock market indices. For example, the VIX index is still trading close to its lowest level this year. The question is then, should we view the apparent resilience of the developed stock markets as a sign that investors are overdoing it selling commodity and risk-correlated currencies. Market shorts seem substantial indeed. It took only some adjustments in RBA’s language to send AUD more than 1.5% higher at one point yesterday.

We are far less sanguine and think that the developed stock markets may be lagging behind other asset classes as investors position ahead of Fed tightening while global economic data continues to fuel market worries. We still see risks on the downside for risk-correlated and commodity currencies going into lift-off, which we expect in September. As highlighted in our recent publication, falling central bank reserves should ultimately bring global asset prices (stocks and bonds) more inline with falling commodity prices and slowing global growth (and global trade). In particular, the FX reserves should fall more on the back of weak (commodity and manufacturing) export revenues. In turn, fears about weakening global demand for stocks and bonds should mount, making current valuations difficult to sustain. Risk appetite should remain subdued and continue to undermine risk-correlated, commodity currencies while propping up safe havens like JPY and EUR. USD should do well as well, but mainly against G10 smalls.

Expect the remainder of the sellside penguin crew to finally “notice” and this gaping divergence in the coming days.

Commodities Collapsed Just Before The Last Stock Market Crash – So Guess What Is Happening Right Now?

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Commodities Collapsed Just Before The Last Stock Market Crash – So Guess What Is Happening Right Now? (Economic Collapse, July 22, 2015):

If we were going to see a stock market crash in the United States in the fall of 2015 (to use a hypothetical example), we would expect to see commodity prices begin to crash a few months ahead of time.  This is precisely what happened just before the great financial crisis of 2008, and we are watching the exact same thing happen again right now.  On Wednesday, commodities got absolutely pummeled, and at this point the Bloomberg Commodity Index is down a whopping 26 percent over the past twelve months.  When global economic activity slows down, demand for raw materials sinks and prices drop.  So important global commodities such as copper, iron ore, aluminum, zinc, nickel, lead, tin and lumber are all considered to be key “leading indicators” that can tell us a lot about where things are heading next.  And what they are telling us right now is that we are rapidly approaching a global economic meltdown.

If the global economy was actually healthy and expanding, the demand for commodities would be increasing and that would tend to drive prices up.  But instead, prices continue to go down.

Read moreCommodities Collapsed Just Before The Last Stock Market Crash – So Guess What Is Happening Right Now?

Commodities Collapsed Just Before The Last Stock Market Crash – So Guess What Is Happening Right Now?

11 Economic Crashes That Are Happening RIGHT NOW

Commodities Collapsed Just Before The Last Stock Market Crash – So Guess What Is Happening Right Now? (Economic Collapse, July 23, 2015):

If we were going to see a stock market crash in the United States in the fall of 2015 (to use a hypothetical example), we would expect to see commodity prices begin to crash a few months ahead of time.  This is precisely what happened just before the great financial crisis of 2008, and we are watching the exact same thing happen again right now.  On Wednesday, commodities got absolutely pummeled, and at this point the Bloomberg Commodity Index is down a whopping 26 percent over the past twelve months.  When global economic activity slows down, demand for raw materials sinks and prices drop.  So important global commodities such as copper, iron ore, aluminum, zinc, nickel, lead, tin and lumber are all considered to be key “leading indicators” that can tell us a lot about where things are heading next.  And what they are telling us right now is that we are rapidly approaching a global economic meltdown.

If the global economy was actually healthy and expanding, the demand for commodities would be increasing and that would tend to drive prices up.  But instead, prices continue to go down.

Read moreCommodities Collapsed Just Before The Last Stock Market Crash – So Guess What Is Happening Right Now?