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What’s Going On With Commodities?

Every day I look at the commodity prices posted on Bloomberg:

LME LEAD FUTURE (USD/MT) 3297.000 117.000 3.68
GASOLINE RBOB FUT (USd/gal.) 203.930 5.790 2.92
LME ALUM HG FUTUR (USD/MT) 2524.750 36.750 1.48
WTI CRUDE FUTURE (USD/bbl.) 71.970 0.880 1.24
LME COPPER FUTURE (USD/MT) 7379.000 69.000 0.94

I noticed that these are all industrial commodities used in a growing world economy. These statistics are for Monday the 27th, but the strength in these commodities has been going on since the beginning of last week.

Take Copper, on the 21st Sept. Copper closed at $3.135. Today it traded as high as $3.45 (+10%) and closed at $3.34 (+6.5%). Annualized that’s 572% and 338%, respectively! The weekly and monthly charts have multiple attacks on $3.80 since the peak at $4.16 in May, 2006. If we break through $3.80, I could see $5.20.

Last week Forbes wrote

The global copper deficit widened in the first half of this year, largely on strong Chinese demand…

In the January to June period of this year, the copper market’s deficit stood at 216,000 tonnes, up 192 pct from the 74,000 tonnes recorded in the same period a year ago.

Meanwhile, mine production rose 4.6 pct to 7.7 mln tonnes over the period, (while) Consumption grew 4.8 pct to 9.06 mln tonnes

This supply deficit is not ending any time soon.

My hunch is that there is a lot of cash sloshing around the world. People in the know see inflation coming down the pike and are fleeing fiat currencies, like the USD.

There is another possibility, a wider war in the mideast. Even French President Nicolas Sarkozy said, “a nuclear-armed Iran would be unacceptable and that major powers should continue their policy of incrementally increasing sanctions against Tehran while being open to talks if Iran suspended nuclear activities.

“This initiative is the only one that can enable us to escape an alternative that I say is catastrophic: the Iranian bomb or the bombing of Iran,” he said, adding that it was the worst crisis currently facing the world.”

Commodities Copper Mover Mike

The ETF GLD???

Hat tip to The Mess Greenspan Made for this chart:

I have never understood how this ETF works, and this kind of thing puzzles me even more. Imagine taking 50 tonnes of gold out of the system in two months and the price of Gold has stopped acting correctly. Whose interest is it to cap the price of Gold?

Gold Precious Metals GLD Mover Mike

Fed Injects!

The FED injected over $17 Billion into the economy on Friday and in one Repo this morning added another $9.5 Billion.

Federal Reserve Repos Mover Mike


The WSJ reports

Under the clarification, issued verbally by New York Fed officials to market participants in the last day, banks may pledge asset-backed commercial paper for which they also provide the backup lines of credit.

“This strikes us as a very big deal,” said Lou Crandall, chief economist at Wrightson-ICAP LLC. Traditionally, he said, banks did not pledge paper that they guaranteed because this would be like “pledging your own IOU as collateral for your own IOU.” But in principle, he said, the “same objection doesn’t necessarily apply to ABCP, as there is an independent pool of collateral underlying the paper.”

The FED feels compelled to do something. After all $500 Billion of commercial paper is rolling over and there are no lenders!

Laureen Drives Entiat Quake Zone

map 1.2 2007/08/23 15:37:14 47.664N 120.318W 0.5 8 km ( 5 mi) W of Entiat, WA

I received a note from Laureen , my Washington geology acquaintance. She writes:

Even though this takes place waaaaaay north of you, I thought I would send you this bit of info before the little yellow squares disappear from the map.

map 1.2 2007/08/23 15:37:14 47.664N 120.318W 0.5 8 km ( 5 mi) W of Entiat, WA

Wenatchee is considered the center of Washington state. At Wenatchee, Hiway 97 divides and travels up both sides of the Columbia River for about 30 miles and then rejoins just north of Chelan.

I travel through this area probably seven or eight times a year. The last few years I generally use the east side of 97. This is why.

Just north of Wenatchee is a small community called Entiat. Right now there are two small yellow earthquake squares at Entiat. It is not uncommon for Entiat to have little red, blue or yellow squares.

When driving the west side of 97 in the area of Entiat, you drive at water level along the Columbia River. The river looks like a lake because it is backed up by a dam. On the other side of your car is a steep rock wall. If you are paying attention you will notice that in one area the rock wall turns to a pile of little rock and crumbles out into the river. When I first noticed it I thought to myself, “wow, it looks like there was a rock slide here.” Then I noticed the little brown, unnoticeable historical sign, so I pulled over to read it. I was standing on Earthquake Point, where at one time the Columbia River had been blocked.

Now if I drive the west side of 97 I break the speed limit getting through that narrow stretch. I know. It is silly. If there was an earthquake in the area it wouldn’t matter what side of the river I was on, but it gives me something exciting to think about on my long drive.

Here are several links to the Entiat earthquakes.





Entiat Earthquake Mover Mike

Alberto Gonzales Resigns

Yes, he’s gone. I and many, many more are surprised it took this long. However, reading the Wash. Post article, I thought, “How quickly they forget!”

At hearings on the U.S. attorney firings, Gonzales frequently said he could not remember details about key events — frustrating members of Congress who felt he was trying to minimize his role in what they regarded as politically motivated dismissals.

Remember Hillary testifying before the Grand Jury about details of her many shenanigans and her famous replies to questions? “I’m sorry, I don’t recall.” Over and Over and Over!”

Alberto Gonzales was never the right man for this job. He lacked independence, he lacked judgment, and he lacked the spine to say no to Karl Rove,” said Sen. Majority Leader Harry Reid (D-Nev.)

Remember Janet Reno? She wasn’t independent of the real Attorney General, Webb Hubbell, who couldn’t serve his position because of his many shenanigans. And was it good judgement she exercised at Waco?

“This resignation is not the end of the story. Congress must get to the bottom of this mess and follow the facts where they lead, into the White House.”

Remember this was all over the firings of a few attorneys who serve at the pleasure of the president. Do you recall that Clinton had all his attorneys fired when he assumed office?

In the White House, he wrote a memo that seemed to condone some forms of torture, a sensitive point as the nation debated the treatment of terror suspects.

My God, even the Democrat Alan Dershowitz advocated the use of torture in some instances.

“Under this Attorney General and this President, the Department of Justice suffered a severe crisis of leadership that allowed our justice system to be corrupted by political influence,” Sen. Patrick Leahy (D-Vt.)

Again, see Janet Reno and Mr. Hubbell. How about William Safire? He deplored

independent counsel Ken Starr’s inability to show that Riady family paid hush money to Webster Hubbell to keep him from telling prosecutors about Hillary Clinton’s role in sham deal; scores failure of Justice Department, under Atty Gen Janet Reno, to force John Huang to tell what he knows about Riady link as part of plea bargain in Clinton campaign finance case.

In the end, there are many who have short memories. In the end we voters think we can change things by changing the parties in power. We kid ourselves!

Alberto Gonzales Bush Mover Mike

Who Elects These People?

Investors don’t have enough to worry about. Now Rep. John Dingell, Michigan Democrat, wants to eliminate the interest deduction on houses over 3,000 sq feet. Why don’t we eliminate the deduction on houses over 2,000 sq feet? Better yet, let’s just eliminate the interest deduction on all homes?
What an idiot!

This is Dingell’s way to get people to conserve energy. He also wants to

…hike taxes on gasoline sales by an unspecified amount and impose a new tax on emissions of carbon dioxide, the main greenhouse gas blamed for (sharp intake of breath) global warming.

Dingell and Jeff Merkley, two politicians that have never met a tax they didn’t like, because they think they can spend our money better than we can.

Rep. John Dingell href=”http://technorati.com/tag/Jeff+Merkley” rel=”tag”>Jeff Merkley href=”http://technorati.com/tag/Mover+Mike” rel=”tag”>Mover Mike

Aaron Russo R.I.P.

Aaron Russo promoting his film America: Freedom to FascismFrom Wikipedia:

Aaron Russo (February 14, 1943 – August 24, 2007) was an entertainment businessman, film maker, and libertarian political activist. Aaron lost his battle with cancer on August 24, 2007.

I posted several times about Aaron Russo here and here. Check out one his finest moments, the production of America: Freedom to FascismAaron Russo href=”http://technorati.com/tag/America:+Freedom+to+Fascism” rel=”tag”>America: Freedom to Fascism href=”http://technorati.com/tag/Libertarian” rel=”tag”>Libertarian href=”http://technorati.com/tag/Mover+Mike” rel=”tag”>Mover Mike

Oregon Jitters

They aren’t big ones, certainly by L.A. standards, but Oregon seems to be jittering:

map 1.1 2007/08/24 05:22:39 44.626N 124.326W 26.9 22 km (13 mi) W of Newport, OR

map 1.4 2007/08/24 03:48:51 45.351N 122.340W 20.2 7 km ( 4 mi) N of Estacada, OR

map 1.3 2007/08/23 20:30:24 44.640N 124.326W 28.5 21 km (13 mi) W of Newport, OR

map 2.8 2007/08/23 15:31:00 44.629N 124.331W 27.2 22 km (14 mi) W of Newport, OR

map 1.9 2007/08/23 14:51:11 43.227N 123.308W 3.8 4 km ( 3 mi) ENE of Roseburg, OR

map 1.0 2007/08/22 13:59:58 44.035N 121.323W 0.0 3 km ( 2 mi) SSW of Bend, OR

Oregon Earthquake Mover Mike


From The National Center for Policy Analysis dated August 24th:

Though many people consider Portland, Ore., a model of 21st-century urban planning, the region’s integrated land-use and transportation plans have greatly reduced the area’s livability. To halt urban sprawl and reduce people’s dependence on the automobile, Portland’s plans use an urban-growth boundary to greatly increase the area’s population density, spend most of the region’s transportation funds on various rail transit projects, and promote construction of scores of high-density, mixed-use developments, says Randal O’Toole, a senior fellow with the Cato Institute.

When judged by the results rather than the intentions, the costs of Portland’s planning far outweigh the benefits, explains O’Toole:

* Planners made housing unaffordable to force more people to live in multifamily housing or in homes on tiny lots.

* They allowed congestion to increase to near-gridlock levels to force more people to ride the region’s expensive rail transit lines.

* They diverted billions of dollars of taxes from schools, fire, public health, and other essential services to subsidize the construction of transit and high-density housing projects.

Those high costs have not produced the utopia planners promised.

* Far from curbing sprawl, high housing prices led tens of thousands of families to move to Vancouver, Washington, and other cities outside the region’s authority.

* Far from reducing driving, rail transit has actually reduced the share of travel using transit from what it was in 1980.

* And developers have found that so-called transit-oriented developments only work when they include plenty of parking.

These problems are all the predictable result of a process that gives a few people enormous power over an entire urban area. Portland should dismantle its planning programs, and other cities that want to maintain their livability would do well to study Portland as an example of how not to plan, says O’Toole.

Source: Randal O’Toole, “Debunking Portland: The City That Doesn’t Work,” Cato Institute, Policy Analysis No. 596, July 9, 2007.

For text:


The National Center for Policy Analysis (NCPA) is a nonprofit, nonpartisan public policy research organization, established in 1983. The NCPA’s goal is to develop and promote private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector.

From: Rhymes With Right

There should be a major political penalty for using this kind of image!

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