Commodity prices doing wonders for Chiles economy and markets....

How long this commodity rally can last is anyone's guess but everyone should know that it will not last forever.


Chile’s Ipsa Stock Index Climbs to Record as Copper Advances


By James Attwood

Dec. 21 (Bloomberg) -- Chile’s benchmark Ipsa stock index climbed to a record as gains in the price of copper, the country’s biggest export, pointed to increased income for South America’s fifth-biggest economy.

The Ipsa index climbed 0.6 percent to 3,518.57, the highest closing level since at least January 1989, according to Bloomberg data. Enersis SA, the Latin American unit of Spanish power company Endesa SA, and pulp maker Empresas Copec SA led gains.

The gauge has rallied 48 percent this year, erasing last year’s 22 percent decline, as the price of the metal used in homes, cars and appliances more than doubled. Copper exports are equivalent to a quarter of Chile’s economy. Copper rose for a second day on speculation that demand will increase from China, the world’s biggest metals user.

“Copper had a nice day today compared to the other commodities, and that helps Chile,” said Greg Lesko, who helps oversee $750 million at Deltec Asset Management in New York, including Latin American shares. “It’s an indirect benefit through the economy.”

Chilean stocks have gained 2.4 percent in the six days since billionaire investor Sebastian Pinera won a first-round presidential election. Citigroup Inc. upgraded its rating of Chilean stocks to “overweight” from “underweight” on Nov. 23, citing a likely victory by Pinera.

Chile’s economy is emerging from its deepest recession in a decade on rebounding commodity prices, record-low interest rates and government stimulus. It expanded 1.1 percent in the third quarter from the previous three months, while continuing to contract year-on-year, the central bank said on Nov. 18. Chile’s gross domestic product is forecast to expand 4 percent next year, according to the median estimate of economists in a Bloomberg survey.

Chile’s peso is the world’s third best-performing currency this year, having climbed 27 percent against the dollar.

Copper futures for March delivery rose or 0.6 percent to $3.1585 a pound on the New York Mercantile Exchange’s Comex unit. The price gained 0.2 percent last week.

 

1) The weather outside is chilly.
2) A bowl of chili for lunch sounds pretty good right now.

 

Any economy based on commodity prices will collapse.

For example: Mexico, Venezuela, Dubai, Russia...

 

Once the bubble in china bursts commodities will fall extremely hard taking down emerging markets as much as 50%.

There is massive bank lending going on in china at this moment feeding the next bubble, look at shanghai real estate, its going to collapse just like the US saw their markets collapse these past 2 years.

Everyone is counting on China, India, Brazil, Russia etc to pull the entire world out of this recession, however (WHEN) the cards do coming tumbling down the next global recession wont be fixed with money but rather time.