An important asset bubble dynamic is on display today as, after rumors of interest rate hikes swirled in China last week and inflation came in hot at 5.1 percent on Friday, timid central bankers have chosen not to hike lending rates and, now, the price of copper has again soared to fresh record highs at over $4.20 per pound.
Details can be found in this report at Bloomberg and there will be more on this subject tomorrow in an excerpt from the current issue of the Weekend Update at Iacono Research, but, it appears that markets are again “emboldened” by the initial stages of monetary tightening and are bidding copper prices sharply higher (along with gold, silver, and other commodities), much as they did for precious metals in the late-1970s, internet stocks in the late-1990s, and housing about five years ago.
