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November 22, 2005
The copper short" question, Tues., Nov. 22, 2005, 2:14 PM
Alan wanted me to address the copper short squeeze possibility re the China situation that I have written about.
Bill, do you believe the rumors that an agent of China shorted the copper market about a year ago and has lost a fortune on paper, but that China instead of buying back the position, China will present 200,000 tons of their 1.3 million tons of reserves soon to the markets to balance the position? This, of course, would be very unsettling to all the metals markets and provide the rocket fuel for all the financial engineers working on the "structural problems" of the stock and bond markets. THE GAMES THAT PEOPLE PLAY!"
I already wrote that the Metal Men in Zug caused that problem and that they are expecting bags of green tea in lieu of USD in settlement. The residents of Zug are envious they don't have a Matterhorn like Zermatt, so they figure to build their own. LOL
Alan, really, who knows? My gut tells me that Mr Joe's bosses in Beijing could announce in a heartbeat that they have suspended direct purchases and financing of purchases of copper for several months. And in the next heatbeat, copper futures would be looking backward, not forward.
Do you understand the terms contango and backwardation? If not, try spending some time to read about Backwardation.
Backwardation in a heartbeat...aaaannnnyyyy time Beijing wants to see it.
Btw, I don't trade futures. There are too many Gnomes, and too many Games. And not all of them involve the 2008 Summer Olympic Games.
Well some maybe.
Posted by Posted by Bill Cara on November 22, 2005 02:14:33 PM | Category: Cara Today in the Market