FCX cutting copper production in half for 2010 (-500 million pounds) and significantly reducing capex. That is about 25% of US production. Same story across many commodities, refiners, etc. etc. With all this excess money and fiscal stimulus, are we setting up 2010 to be the year of 6.00 copper, 200 oil, 2000 gold, 20.00 soy, 8.00 corn, etc. etc. ?
from today's beige book "Tightening credit conditions for agricultural producers were noted in the Kansas City, Dallas and San Francisco Districts."
massive global demand destruction is definitely going to prevent a commodities rally in real terms, but future inflationary conditions may allow one in nominal terms. precious metals are the sole exception, and i think they will rally huge into 2012 and beyond.
How can there be demand destruction for wheat and rice? I could see some for corn since it's been inflated being used for ethanol, but the other two, don't you still have to feed people?
Loss of current wealth/purchasing power and more importantly huge loss of perceived future purchasing power abroad in emerging markets.
Many OTC transactions were also facilitated by lines of credit with the same financial institutions now receiving charity money...