GOLD WEAKEST IN 5 YEARS, CONCERN OVER COMMODITIES CRASH

[FROM THE MANAGEMENT...AFTER 5 EDITS, SOMETHING IS STILL VERY MUCH AMISS WITH THE FORMAT, FONTS, EVERYTHING AT THE TEA ROOM, SO IF YOU FIND THIS UNREADABLE, DROP US A COMMENT?]

THE TEA ROOM REPORTS LITTLE ON FINANCIAL TOPICS BECAUSE I AM NOT BY ANY MEANS EXTREMELY KNOWLEDGEABLE OF SUCH, BUT THIS COMMODITIES SLUMP CAUGHT MY EYE BECAUSE SOME "GREAT MINDS" IN THE FINANCIAL WORLD HAD 'PREDICTED' IT, MOSTLY THOSE WHO SAY WE'RE HEADED FOR ANOTHER REALLY SERIOUS STOCK MARKET CRASH.

SURE ENOUGH, BEFORE THE LAST BIG NOSEDIVE ON WALL STREET IN 2008, COMMODITIES DID INDEED COME CRASHING DOWN...BUT THE BLOOMBERG COMMODITY INDEX THIS PAST WEDNESDAY SHOWED A 13-YEAR LOW!

OF COURSE, BLOOMBERG'S WIZARDS HAVE FIGURED OUT WHAT'S WRONG.
"Raw materials are losing favor with investors as the dollar gains amid signals from Federal Reserve Chair Janet Yellen that the central bank may raise rates this year on the back of an improving U.S. economy. "

I'D RATHER HEAR THAT IT WAS BECAUSE GRAY ALIENS STOLE HOME PLATE FROM YANKEE STADIUM WHICH FORCED SQUIRRELS TO KICK THE ACORN HABIT...MAKES ABOUT AS MUCH SENSE, NO?

HOW ABOUT, "LOOK, NOBODY'S BUYING THIS STUFF. MAYBE THEY'RE BROKE?"
OR...
"HMMM, GUESS, FOR NOW, EVERYONE HAS ALL THEY NEED!"

STILL, LOWEST COMMODITIES PRICES IN 13 YEARS?
MADE ME LOOK AGAIN!
WHAT ARE COMMODITIES?     

BLOOMBERG GIVES US A HINT:

"Gold futures sank to the weakest in more than five years while industrial metals, grains, Brent crude and U.S. natural gas also slid as a measure of the dollar climbed to the highest since April 13."
"HIDE THE CHILDREN, HIDE THE CHICKENS! WALL STREET WILL LOSE ITS MIND OVER LOW BRENT CRUDE!"

NO, SERIOUSLY, THEY WILL.

COMMODITIES ARE DEFINED BY <DRUM ROLL, PLEASE> "INVESTOPEDIA" <CUE TRUMPET BLASTS> , THE ABSOLUTE AUTHORITY ON FINANCIAL JARGON...

"1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services." 
CLEAR AS MUD, TRY AGAIN, INVESTOPEDIA .

"Some traditional examples of commodities include grains, gold, beef, oil and natural gas. More recently, the definition has expanded to include financial products such as foreign currencies and indexes."
FOREIGN CURRENCIES ARE COMMODITIES?
WHO KNEW?

INVESTOPEDIA HAS A VIDEO TO EXPLAIN TO US ALL ABOUT COMMODITIES, IF ANYONE GIVES A RIP...
IT'S CUTE, SORT OF...
SEE IT HERE: http://www.investopedia.com/terms/c/commodity.asp

OKAY, ENOUGH FACETIOUSNESS AND FOOLING AROUND, LET'S GET TO WHAT THIS CAN MEAN, OR PROBABLY MEANS.

THIS "COLLAPSE" OF THE COMMODITIES MARKET, AS I SAID, CAME DOWN THE PIKE BEFORE THE 2008 (AND BEFORE) U.S. FINANCIAL "DOOMSDAY", SO IT'S RATTLING A FEW CAGES.

CNBC QUOTED ANOTHER FINANCIAL "SEER" AS SAYING:

“This commodity bear market is like a train wreck in slow motion,” said Andy Pfaff, the chief investment officer for commodities at MitonOptimal in Cape Town. “It has a lot of momentum and doesn’t come to a sudden stop.”

I READ THIS ON MORE THAN A FEW WEBSITES, 
CAN'T DETERMINE WHO SAID IT FIRST,  BUT...
"...Global commodities such as copper, iron ore, aluminum, zinc, nickel, 
lead, tin and lumber are all considered to be key “leading indicators” that 
can tell us a lot about where things are heading next. And what they are 
telling us right now is that we are rapidly approaching a global economic meltdown."

MIGHT WE SAY, "GRAB YOUR BUTTS, FOLKS, THE STOCK MARKET 

SINKS AGAIN!"???

"GLOBAL ECONOMIC MELTDOWN" IS IT?
WHETHER SENSATIONALISM OR VERY STRONG POSSIBILITY, 

WE MAY WANT TO WATCH THIS PLAY OUT, RIGHT?

I say watch it because...  

We CAN see that the Australian dollar is at a six-year low against the U.S. dollar.
What are Australia’s biggest exports?
Iron-ore and other metals.

We CAN see Canadian currency is also at a six-year low versus the U.S. dollar. 

Canada is a big oil exporter, particularly some tar sands oil, which is expensive 

to produce.

We also CAN see the Brazilian real at a 10-year low versus the U.S. dollar.
Why?
Because it’s a "natural resource" country and they don’t have a hungry market to sell 

their natural resources to.

Meanwhile, we CAN look at India's rupee, at a 17-year low against the U.S. dollar.
Why?
Because manufacturing is slowing down and there is less development.

If Americans aren’t buying, the Indians, the Chinese, the Vietnamese, etc, are just 

not making things to sell.

SO, YES, IT'S A GLOBAL SITUATION, AFFECTING A LOT OF GLOBAL COMMUNITIES!  

DIDN'T WE TAKE ALL THE SAME NATIONS DOWN WITH US BACK IN 2008?

IF YOU LOOK AT THE "FINANCIAL NEWS", SEVERAL MINING AND ENERGY COMPANIES DID ANNOUNCE LAYOFFS AND CUTBACKS IN THE PAST WEEK 

OR TWO.

YE OLDE WALL STREET JOURNAL WAS ALL ATWITTER OVER THAT NEWS, 

AND IF YOU WANT TO DIRTY YOUR PAWS BY GOING OVER THERE FOR A 

READ, I WARN YOU, THEY LAID IT ON PRETTY THICK...

"The world’s biggest mining companies are hemorrhaging jobs as they 

downsize to cope with a prolonged China slowdown and a 

commodity-price slump that they no longer expect to end soon."

"HEMORRHAGING"?
SOME 'SHOCK AND AWE" AND IMAGES OF BLOOD AND GORE FOR US, 

I SUPPOSE, TO PERK UP OUR DROOPING LITTLE EARS.

["SELL, SELL!" SAYETH WSJ.]

MOVING ON...

CHICAGO TRIBUNE WROTE:

"The FTSE 350 Mining Index plunged as much as 4.9 percent to the 

lowest since 2009 on Wednesday, with BHP Billiton Ltd. and Anglo 

American Plc leading declines. Gold and copper are near the lowest 

in at least five years, while crude oil retreated to $50 a barrel."

"We're probably not too far off a global industrial recession," 

Colin Hamilton, London-based head of commodities research 

at Macquarie Group Ltd., said in interview...

"The bad news is yet to play out in terms of iron ore oversupply 

and we think demand conditions are going to get worse for copper 

as well," Richard Knights, a mining analyst at Liberum Capital Ltd. 

in London, said by phone.

Societe Generale SA expects surpluses in copper, aluminum
and tin this year.

Norsk Hydro ASA said on Tuesday that China's exports
were compounding a global aluminum glut and damaging
the industry.

Gold fell as Goldman Sachs Group Inc. predicted further
declines and investors sold more through funds.
Prices reached a five-year low of $1,080 an ounce on Monday
and holdings in exchange-traded products are the lowest since 2009."   

WOW, WHAT A GREAT OPPORTUNITY FOR ANYONE OUT TO
JUST FORCE COMMODITIES TO NEW LOWS, YES?
I MEAN, LOOK AT ALL THOSE "DOOMSAYERS"!
THAT HAS TO BE SOME KIND OF NEW WORLD'S RECORD
FOR NEGATIVISM. 
I BLOODY WELL WOULDN'T BUY ANY 'COMMODITIES'
WITH ALL THOSE "EXPERT EXPERTS" SAYING ALL THAT,
WOULD YOU?

WELL, MAYBE COPPER...AND MAYBE A WEE BIT OF GOLD, 

AND A FEW OTHER THINGS THAT JUST SCREAM, "YOU CAN NEVER 

DO WITHOUT ME AND YOU WILL NEED ME AGAIN REALLY SOON!"

CALL ME IRRESPONSIBLE, BUT AFTER NOTICING LAST WEEK THE 

DECLINE ON SHELVES OF PAPER GOODS, I BOUGHT THOSE LIKE CRAZY!

WHEN EVEN FEWER CHOICES IN THINGS LIKE PAPER TOWELS WERE
ON THE SAME SHELVES THIS WEEK, I JUST SMILED...I GOT MINE!

AND I HAVE PLENTY FOR NEXT WEEK, AND THE NEXT...

SO WHY DOESN'T "THE MARKET" WORK THAT WAY?
MAYBE IT DOES!

JUST MAYBE, LIKE YOURS TRULY, THE SMART BOYS OF INDUSTRY
PICKED UP A LOT OF "STUFF" AND MAYBE WERE A LITTLE PERTURBED
AT THE PRICES THEY HAD TO PAY, AND ARE JUST PLEASED AS PUNCH
TO SEE PRICES PLUMMET?

WHEN PAPER TOWELS AND SUCH COME BACK ON THE SHELVES AT
HIGHER PRICES, GUESS WHAT?

I KNOW, LOUSY "FINANCIAL PLANNING", BUT I'VE GOT MINE,
LIKE I SAID...
AND WHEN PRICES GO UP AGAIN?
I CAN WAIT THAT OUT...

CAN YOU?

THAT SEEMS TO BE THE GAME OF GAMES ON WALL STREET...
WHOEVER BLINKS FIRST LOSES.

I REALLY LIKED THIS HEADLINE:

"Wall Street prepares to fleece Main Street again"

"Things are beginning to happen in the markets. 

People in the know can sense a change in the wind. 

Those people in the know are predators on Wall Street and
they are prepared to pounce on their traditional prey -
retail investors. 
In this era of ZIRP (zero interest rates) everyone searched for
greater yield. Because of the historically low interest rates,
those yields could only be found in non-traditional, and more risky, places.  
“They are going to be toast,” David Tawil, president of hedge fund
Maglan Capital LP, said of the funds holding hard-to-sell assets like
emerging-market debt and small-capitalization stocks. “It will be one
of our first levels of shorting the moment we start to see cracks,
because it’s ripe with retail, emotional investors.”   
[SEEMS GLEEFUL, DOESN'T HE?]   
According to Royal Bank of Scotland Group,
liquidity in the credit markets has dropped 90%
since 2006. It isn't just corporate bonds. Government
bonds have also become hard to sell.  
Of course this doesn't actually mean much without some sort of
trigger that would cause people to want to sell.

It turns out that the trigger is happening right now. 
[COMMODITIES PLUMMET.]   
To put it simply, the last time commodities crashed like this,
they did it just a few months before the entire financial system broke.   
Does that mean we are going to see a repeat of 2008?  
Absolutely not. 

The dynamics are very much changed since then.

THAT WEBSITE HAS SOME NICE GRAPHS, AND THIS ONE
REALLY POPPED OUT FROM THE REST:

SEE THAT "THIS WAS NOT SUPPOSED TO HAPPEN" IN RED?  

WHO SAID IT WASN'T SUPPOSED TO HAPPEN?

THE BIG OIL GUYS HERE.

"OOPS!"

CAT'S OUT OF THE OLD BAG!

IT WASN'T SUPPOSED TO HAPPEN!

BUT THEN THE AUTHOR OF THAT PIECE QUOTES ANOTHER "SEER"...   
“The commodity price is telling the U.S. shale sector to shrink,”
said Subash Chandra, an oil analyst at Guggenheim Securities
LLC in New York. “Barrels from
the U.S. are on a collision course with barrels coming out of Iran,
Saudi Arabia and elsewhere.”   Energy producers in North America are cutting production,
but it isn't happening fast enough.
Several OPEC nations are increasing production
in order to pay for wars."   
AND THERE IT IS, FOLKS, JUST AS I SAID, THE BOTTOM LINE IS
LOW OIL PRICES, WHICH WALL STREET WILL NOT TOLERATE
FOR LONG!   
CHEAP OIL MAKES BIG INVESTORS AND OIL COMPANY EXECS CRY! 

CHEAP OIL IS ONLY GOOD FOR THOSE WHO LIKE PAYING LESS AT T
HE PUMPS AND POCKETING THE SAVINGS!  

BESIDES, IF WE DIDN'T HAVE TO DEPEND ON OPEC NATIONS FOR OIL
ANYMORE, THERE'D BE NO EXCUSE FOR EITHER THE ONGOING
BUTT-KISSING OF IRAN OR OUR DEEP INVOLVEMENT WITH THE
HOUSE OF SAUD, OR OUR FIGHT TO SAFEGUARD ALL THOSE OIL
FIELDS FROM THE LIKES OF ISIS, AL QAEDA, OR ANYONE ELSE.

IF WE WERE OIL INDEPENDENT, WE MIGHT EVEN THINK ABOUT
CALLING ALL OUR TROOPS HOME FROM THE MIDDLE EAST,
LET THOSE NATIONS OVER THERE SLUG IT OUT AS THEY HAVE
FOR CENTURIES UPON CENTURIES BEFORE WE NEEDED LOTS
OF OIL AND WENT OVER TO "HELP OUT", TO "HELP THEM FORM
DEMOCRATIC SOCIETIES", WHICH THEY NEVER INTENDED TO DO
ANYWAY.   
WE'RE BACK TO OIL, AND IF WALL STREET CAN HELP OUT THE FED BY LOWERING GOLD PRICES AT THE SAME TIME, THEN WOW!

WE MAY GET A REAL CRASH AFTER ALL!

AND PANICKED AMERICA WILL DO WHAT?

BAIL OUT EVERY NAME THAT TRADES ON WALL STREET
AND THE BIG BANKERS AT THE EXPENSE OF AMERICAN
TAXPAYERS, AND THE SERF CLASS WILL EAT IT AND SMILE!

AGAIN, AND AGAIN, AND AS MANY TIMES AS THE GUYS WHO
RUN THE SHOW CARE TO HIT "REWIND" AND "PLAY IT AGAIN, SAM".

THINK ABOUT THIS...
THINGS WERE NOT GOING WELL FOR COMMODITIES, THEN,
"OOPS!", THE FEDERAL RESERVE HAD AN UNFORTUNATE LEAK
THAT LET THE WORLD KNOW THEY'RE GOING TO RAISE INTEREST
RATES IN SEPTEMBER.

THAT SHOULD DO QUITE NICELY TO PUSH THE COMMODITIES MARKET
RIGHT OFF THE CLIFF!
MISSION ACCOMPLISHED, JUST LIKE IN 1928!

THE UPCOMING CRASH WAS PREDICTED TO OCCUR LAST YEAR,
BUT LIKE THAT GRAPH ABOVE SHOWS, NO ONE WAS COUNTING
ON LOWER OIL PRICES, SO WE NEEDED ANOTHER TRIGGER.
GOT ONE NOW!

SO, IT IS TIME FOR THE WORN-OUT PHRASE....

LEARN OR PERISH!

WHAT DID AMERICANS LEARN FROM 2008?
NOT MUCH.

WILL WALL STREET, THE FED AND ITS BIG BANKS HAND US ANOTHER "GREAT DEPRESSION" LIKE THEY DID IN 1929? 

[SEE http://havacuppahemlock1.blogspot.com/2014/03/will-federal-reserve-crash-market-in.html ]

IT PAID NICE DIVIDENDS BACK THEN FOR
THOSE WHO MANAGED TO CREATE IT!

[SEE http://havacuppahemlock1.blogspot.com/2014/03/who-prospered-from-great-depression.html]

FURTHER READING:
~ BERNANKE STATES FEDERAL RESERVE CAUSED GREAT DEPRESSION

~ Remarks by Governor Ben S. Bernanke 

At the Conference to Honor Milton Friedman, University of Chicago, Chicago, Illinois, November 8, 2002

~ THE GREAT DEPRESSION, MISES INSTITUTE