Iron Ore Price CRASHES — China Slows — Precious Metals Not So Precious — Corny Prices — Zuby Wisdom- [09-19-2021]

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THIS WEEK’S EDITORIAL

IRON ORE COLLAPSES- CHINA SLOWS:  This year, BOOM has written often about his expectation for falling commodity prices and the expectation of more falls. Recently, BOOM wrote “As China’s economy slows, it will tend to lower global commodity prices — especially in regard to the key commodity inputs into the Chinese economy.”

Since July 16th, the Iron Ore price has fallen from US $ 222 per tonne to just $ 104 per tonne. BOOM’s stance has been vindicated. That is a price CRASH and BOOM suspects that it will continue as the price of Iron Ore falls towards $ 50 per tonne.

The big iron ore producers will be affected significantly by the China slowdown. BHP, RIO and VALE stock prices in New York have already fallen by 26 %, 20 % and 30 % respectively since mid July. There is a term used in financial markets for this situation — “catch the falling knife”. It can be a dangerous game.

Palladium has also fallen — from its peak of $ 280 in early May to $ 180. As with Iron Ore, BOOM expects further falls will happen as the price heads back towards $ 100.

PRECIOUS METALS UNCERTAINTY – So let’s look at other weak commodity prices.

Precious metals prices have been weak over the last 12 months with buyers remaining unenthusiastic. Prices are again under pressure as far as BOOM can see. The US Dollar price of Gold (Continuous Contract) has fallen from $ 2,100 to the current price at $ 1,750. The US Dollar price of Silver (Continuous Contract) has fallen from $ 30 to just above $ 22. That is a 26 % fall annualized. Yikes. To BOOM’s jaundiced eye, these prices continue to look weak and unattractive.

Platinum has joined the party late. It peaked in February at $ 1,350 and is now at $ 930 — a fall of 30 % in 6 months. If that continues, investors will be looking at 60 % losses during 2021 if they bought at the peak mid February price levels. Yikes again.

The current price dynamics of these precious metals do not look strong to BOOM.

Meanwhile, the US Dollar Index has been trading in a strong sideways range over the last 12 months. US Dollar movement is clearly not the cause of these commodity and precious metals price falls.

CORNY PRICES – The price of Corn doubled from August last year at US$ 350 to $ 700 in May this year. A staggering increase indeed and one of the reasons why some people were predicting a CPI inflation outbreak. But since the peak at $ 700 in May, the price has fallen to just $ 500 and it looks friendless at current levels. BOOM is not confident of buyer interest here.

The Agriculture ETF traded in New york with the code DBA has been trying to continue its stellar rise that began in July last year but has been struggling to rise above $ 19.50 fpr the last 5 months. The strong run looks like it is over. BOOM expects the price to fall from here.

OIL PRICES SHOULD JOIN THE PARTY – With key Chinese input commodity prices falling, precious metals prices falling and food input prices falling or reaching overhead resistance, BOOM is now looking for the price of Oil to weaken and begin a descent. West Texas Light Crude is currently trading around $ 72 per barrel (Continuous Contract). BOOM expects a price range of $ 40 – $ 50 by the end of the year. However, the future is unpredictable because anything unexpected can happen. Unexpected events can play havoc with expectations.

As long term readers will know, BOOM has held the view for some time that CPI inflation threats have been exaggerated. BOOM feels that any CPI inflation in the advanced economies this year (and probably all of next year) is going to be transitory. The Fed in Washington DC agrees.

TWENTY OBSERVATIONS ALL OVER THE NET – The UK-based rapper known as Zuby recently listed 20 observations on Twitter, and his list went viral. His real name is Nzube Olisaebuka Udezue. And his specialty seems to be commonsense.  BOOM especially likes this one — “Access to limitless information has not made the average person any wiser.”

QUOTE:

20 Things I’ve Learned (Or Had Confirmed) About Humanity During The “Pandemic”

  1. Most people would rather be in the majority, than be right.
  2. At least 20% of the population has strong authoritarian tendencies, which will emerge under the right conditions.
  3. Fear of death is only rivaled by the fear of social disapproval. The latter could be stronger.
  4. Propaganda is just as effective in the modern day as it was 100 years ago. Access to limitless information has not made the average person any wiser.
  5. Anything and everything can and will be politicized by the media, government, and those who trust them.
  6. Many politicians and large corporations will gladly sacrifice human lives if it is conducive to their political and financial aspirations.
  7. Most people believe the government acts in the best interests of the people. Even many who are vocal critics of the government.
  8. Once they have made up their mind, most people would rather commit to being wrong, than admit they were wrong.
  9. Humans can be trained and conditioned quickly and relatively easily to significantly alter their behaviors — for better or worse.
  10. When sufficiently frightened, most people will not only accept authoritarianism, but demand it.
  11. People who are dismissed as “conspiracy theorists” are often well researched and simply ahead of the mainstream narrative.
  12. Most people value safety and security more than freedom and liberty, even if said “safety” is merely an illusion.
  13. Hedonic adaptation occurs in both directions, and once inertia sets in, it is difficult to get people back to “normal.”
  14. A significant % of people thoroughly enjoy being subjugated.
  15. “The Science” has evolved into a secular pseudo-religion for millions of people in the West. This religion has little to do with science itself.
  16. Most people care more about looking like they are doing the right thing, rather than actually doing the right thing.
  17. Politics, the media, science, and the healthcare industries are all corrupt, to varying degrees. Scientists and doctors can be bought as easily as politicians.
  18. If you make people comfortable enough, they will not revolt. You can keep millions docile as you strip their rights, by giving them money, food, and entertainment.
  19. Modern people are overly complacent and lack vigilance when it comes to defending their own freedoms from government overreach.
  20. It’s easier to fool a person than to convince them that they have been fooled.” UNQUOTE

In economics, things work until they don’t. Until next week …………  Make your own conclusions, do your own research.  BOOM does not offer investment advice.

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Author: Austrian Peter

Peter J. Underwood is a retired international accountant and qualified humanistic counsellor living in Bruton, UK, with his wife, Yvonne. He pursued a career as an entrepreneur and business consultant, having founded several successful businesses in the UK and South Africa His latest Substack blog describes the African concept of Ubuntu - a system of localised community support using a gift economy model.

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Nothing but the truth.
Nothing but the truth.

AP ,you fail to understand the real reason PM prices have been lacklustre. It surprises me how so many pundits on this subject fail to see the elephant in the room. That elephant is the commodity futures markets ,where naked shorting of PM’s is allowed and the bullion banks, the BIS and the ESF are continually using this fraudulent method to manipulate and drive the prices down. In effect they are short trading in fake, synthetic metals to suppress prices ,thereby lending support to the US $ . The ESF’s main objective is to maintain the US $’s role as the world’s reserve currency and the biggest threat to the US $ is undeniably gold and silver-always has been and always will be. The naked shorting method they use on the futures markets, like Comex, is nothing short of fraudulent , counterfeit and downright dishonest. After all what other financial instrument can be shorted without having ownership of the underlying asset ? To short a stock , one is required to ‘ borrow ‘ those shares from a broker, meaning that your trades are fully covered by actual stocks. That is not the case on the commodity future markets ,where the trader need only have a fraction of the physical metal ( as low as 10%) of the trades he is executing. So PM prices are not reflective of the true market forces of supply and demand, but are at the dictates of these corrupt trades. Much like this virus plandemic, the pricing of PM’s is a scam and a hoax and simply do not reflect the true market dynamics and fundementals in play- rising inflation, low interest rates and a dying US $.

Ken31
Ken31

True for Au and Ag, but Pt and Pd are not as manipulated and they are behaving as you would expect commodities to behave.

The naked shorting is beyond obvious for Ag and Au, just based on dollar strength and economic forecasting. Peter alluded to other forces at play, he didn’t attempt to specify them.

Ken31
Ken31

I say this is a good article, because I have questions and it made me think.

Questions:

1) What do YOU mean by “transitory inflation” and how does this relate to the interplay between inflationary and deflationary pressures in play?

2) What units are you pricing palladium? I have never seen it in anything but troy ounces. I have been watching its price action with curiosity. I interpret it as mainly pessimism in auto manufacturing, but it could be related to other pressures as well.

3) Hedonic adaptation occurs in both directions, and once inertia sets in, it is difficult to get people back to “normal.”:

Can someone explain what this means?

Comments:

You have a great list there.

3. Fear of death is only rivaled by the fear of social disapproval. The latter could be stronger.

I would say that several are downstream of this aphorism including “Most people would rather be in the majority, than be right.”

Except “Once they have made up their mind, most people would rather commit to being wrong, than admit they were wrong.” is just ego and that is a tough nut to crack. I know because I am trying. Anyone with wisdom on that is welcome.

12. Most people value safety and security more than freedom and liberty, even if said “safety” is merely an illusion.

It is worth thinking about what all those definitions mean as you try and relate them. On its face, these are survival traits. We also have the ability to plan and think if these survival traits are leading to beneficial results in the long term. They usually don’t. They are for when the shit hits the fan, not peak prosperity. So, you can see how people with evil intentions seek to turn that on its head.

14. A significant % of people thoroughly enjoy being subjugated.

These are called women and it is the primary reason they should not be allowed political agency. I don’t say this out of any sense of “misogyny”.

19. Modern people are overly complacent and lack vigilance when it comes to defending their own freedoms from government overreach.

I don’t think this is a modern problem. I think it describes when the ruling classes feel most comfortable betraying the trust given them.

Stucky

Dear AUSTRIAN Peter … who lives in ENGLAND …. but wants to move to SOUTH AFRICA ,

May I make a suggestion? Please? Feel free to take it or leave it.

It’s about that somewhat lengthy introduction. You might want to consider putting it at the END of the article. Why?

— 1). We’ve seen it a gazilion times. We get it.

— 2) But far more importantly, it takes away precious space from what is displayed in the available space (before the “continue reading”). It would be far more beneficial and informative to read your actual article, rather than the introductory blah-blah stuff. It would surely give readers a better feel as to whether or not they should click on “continue reading”.

Submitted humbly (and for FREE) by your wannabe Editor.

Anonymous
Anonymous

How about YOU post less.
You fucking live here.

Stucky

Go suck your own micro dick you Anon coward piece of shit.

Anonymous
Anonymous

You are one sad individual.
Enjoy your life of internet until the grid goes down…then what, start drinking when you wake up?

Anonymous
Anonymous

youre giving us other Anons a bad name there, mate

Ken31
Ken31

I just assume anons are people with Brave who closed their browser and don’t feel like filling it in yet.

TN Patriot
TN Patriot

The same could be said for Sunday Morning Classics, but those of us who are regulars know the introduction and skip over it. Newbies might find it helpful.

THE
THE

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