12 June 2014

The Origin of Specie

Some may recall these endeavors' reporting a few months back on the so-called myth of Dr Copper: it appeared, according to reports, that Chinese businesses were using copper stores as surrogate specie. Some saw the fall in price as an omen of larger collapse. Well. The reasoning is that copper has actual industrial uses, and its price is therefore a simple surrogate for manufacturing. Kind of like an anecdotal copula; skip the hard data collection, and just watch the price of copper. The correlation is tight as a drum, don't you know?

Turns out the Chinese may have a general commodities issue. Could be Ponzi, could be pyramid, could be simple fraud. "Beautiful Redhead in the third at Suffolk. Can't lose!!"

Oh, and by the way, while I only read the headline various places, Steve Forbes is on his gold standard LSD trip again. Why? Well, as one of those .01%-ers with mucho moolah, with no idea how to invest it productively, and demanding the God given right to 15% return on his moolah, deflation looks like the best deal available. Go read the economic history of 19th century USofA, and you'll see a hundred's year war of the money holders against everyone else. Deflation and wealth concentration was the course. Rand would be giddy, naturally.

Regular reader can see a rotating (and a few permanent, so far) set of quotes that top these endeavors. Here's the one apropos to this missive:

If you like what OPEC means for oil prices, you'd love what the gold standard would do to financial markets.
-- Michael Feroli/2011

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