According to the financial media, the global economy is supposedly rolling over causing a glut of inventories producing a deflation in the prices of many commodities. If this is the case… someone should tell that to King of base metals… Copper.
Something doesn’t seem to be making sense in the copper market as the price continues to decline, so are the level of global copper inventories. You would think the opposite would be the case, but we must remember in the new Financial Paradigm — Paper assets such as Derivatives, Stocks and Bonds are KING, while Gold-Silver and commodities are GARBAGE. Which is why (according to their mentality), financial assets are what we should EAT, while gold-silver and commodities are what we flush down the toilet once we are done digesting and consuming them (put another way–CRAP).
Here we can see that end of September copper inventories in 2014 are the lowest in six years…. and at a 4.6 day supply.
Just maybe the copper traders know that inventories are going to header higher by the end of the year if the global economy continues to shrink. However, a 4.6 day supply of copper doesn’t seem like the demand for the king base metal is really falling all that much… or am I missing something here.
Lastly, there is speculation that the Chinese may be buying and hoarding copper that isn’t recorded in the “Official Inventories.” I say… so what.
If I were Asian or Chinese, I would rather spend $1.8 billion to purchase the rest of the 263,000 mt of global copper inventories than spend another lousy RED CENT on U.S. Treasuries that will become worthless at some point in the future.
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