Wednesday, April 12, 2006

Metals Aglow
Fierce Surge by Metals Sets New Price Records
Published: April 12, 2006

All the major Metals are up, and all because of Investment Fund buying. Why the Investment Fund Buying at this time? The Corporate Earnings reports are due out soon, and no one expects a glowing picture. Most Fund managers also expect the Fed may continue to raise Interest rates, which always precipitate a Stock value decline over the long haul. Almost all the Fund managers estimate Oil prices have functionally maxed in the Short-term, and marginal Day-Trading style Profits taking is out on the Oil markets. The Fund managers are invading the Commodities and Resource markets, hoping for quick Profits.

We may be seeing the result of the Bush Tax Cuts! These Tax Cuts may not actually promote economic performance--there has not been marked expansion of Employment, no hard Capital investment except in Residential Housing, or the typical growth rates of recoveries from previous Recessions. The real growth in the Economy has been in the area of Government Spending, and increased funds released for People to build their Dream homes. We have witnessed Speculation funds grow geometrically, while Investment decisions have grown wilder and more reckless. Investment Fund managers have turned into Plungers in the market, putting real money behind Day Trading.

What has brought the Change? It is the desire for excess immediate Profits before George W. Bush leaves Office, and more rational thought will begin to limit the excesses of the Tax Cuts. The philosophy of 'Grab the Cash and Run' has spun out of control, and is the fault of the Tax Cuts in the first place. They have stacked up the Cash in the accounts of Investors, and threat of Tax reinstatements spur them in the direction of Quick-Turnover Profits taking. The behavior artifically inflates Consumer prices, while the quick accumulation of Funds does increasing damage to the Markets. Bush's Tax Cuts have probably retarded an already slow Recovery. lgl

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