While doing a Google search for "China's Copper Stockpile", I came across these articles in the "India Daily" Newspaper online.
Have a read of these publications, talk about doom and gloom. Interesting to see what different perspectives the global punter gets to mess his mind up.
Copper stockpile cycles indicate collapse in copper prices and start of global depression
Dec. 30, 2006
The stockpiles in copper follow a eight year cycle. For approximately four years the stockpile deplete to very low inventory and then it rises back to new record highs. The cycles lead the inverse copper price cycles by a year or so. In early 2003 copper stockpile peaked and then in early 2006 it got depleted to lowest levels. The cycle is systematic since 1920. It seems this time also it is no different.
Copper predicts the world economy well in advance. Interestingly, every time copper stockpiles make tops, these are new higher highs. For example the stockpile high in 2003 was higher than in 1999-2000 and that in turn was higher than in 1993. This really means the higher copper price brings in enormous amount of copper in recycling and copper stockpiles is bigger than ever.
If that happens, copper can fall below $1.00 per pound. What is more important is that fall in copper price is always accompanied with global recessions. The stockpiles go low during the economic boom and go high during the economic slowdown. The cyclic behavior of copper stockpile and the price show that economic recession or depression may be very near.
Crude oil reversed its upward trend of four years – 2007 can be a disaster in oil and gold market
Dec. 29, 2006
Oil has fallen 0.8 percent this year in New York to $60.50 a barrel, set for the first annual decline since 2001, after surging 45 percent in 2005 and 37 percent in 2004.
The technical charts manifest a total meltdown in oil and gold market in 2007-2008. Interestingly, that can be actually bullish. Oil and gold will fall in 2007-2008 only to go much higher that where it is today by 2011. The bull market correction is required; experts say to correct the sentiment. When I wrote the first article on Gold’s and oil’s problem, gold was at $725 an ounce and oil at $78 a barrel. I received at least countless emails on how wrong I am. The ratio of public bulls to bears on gold and oil was 1000 to 1. I was more convinced I was right.
Oil is headed for $30 a barrel – perhaps $20. However, please note no one can guarantee a specific price. It depends on supply and demand. In the next two years the supply is abundant and world economy will weaken considerably. That makes a case for much lower oil price. But that will be followed by catastrophic oil demand as the supply from existing sources abruptly collapse due to complacency in exploration and production guided by low prices.
Gold is a different story. Gold has entered a cyclical bear market within a secular bear market. As many believes today, Gold will reach $2500 an ounce by 2012 but after retesting $350 an ounce by 2008. The world economies are showing signs of transforming into deflation driven recessions from stagflation driven underemployed economies. Things will change in 2009 when the major central banks decide to pump the economies with enormous amounts of liquidity and currency – Gold will go through the roof. For now deflation will kill gold and oil markets.
A classic divergence between Nasdaq and Dow shows underemployed economy ready to shock the stock market in January 2007
Dec. 28, 2006
In the final stages of the bull market, a lot of margin money in the hands of a few chasesa few select stocks creating what is known as diveregences. That is exactly what has happened. While Dow went up staedily, Nasdaq is going nowhere – a staggering 50% below the highs in year 2000.
The Dow broke its old high and made several new highs. But the Nasdaq – the growth side of the economy is hovering around 2400 with largest amount of liquidity in the system.
The net effect is a catastrophic collapse in worldwide stock markets in early 2007 – perhaps as early as January 2007. The collapse will propbably start from Euro Zone as German consumers go on strike as the new staggering 3% increase in value added tax take hold. It will then spill over to the US market and then to the Asian market.
Since 2000 collapse of dot com economy, 10 trillion dollar asset has been craeted in real estate though tax cuts and other fical incentives including lowered interest rates. However little of that has trickled into the product6ive side of the economy. The divergence between Nasdaq and Dow manifests how the bubble is raging in idle inherited wealth and the same time the enterprenureism is really dead in the water.
How far can the bubble continue? It depends on how much air can be pumped in. There are early signal the end of the game has come. In 2007 the stcok markets will collapse and a worldwide depression will start. Stagflation will change to deflation. Asia and Europe will be most affected as America tends to become more protective between 2007 and 2010.
Disclosure: No I don't, nor will I ever own any shares in the "India Daily"