keeping it simpleUS Fed to drop rates this year and money flows...

keeping it simple

US Fed to drop rates this year and money flows back into the market and commodities. I identified the volume coming in last year and here it is. new highs.
will it last

copper has been under pressure since its $4.50 spike. has it fallen? yes but not a lot. the demand remains.

the $US

the year 2000. I always come back to the year 2000 as the start of this run. what happened then?

the year 2000 was the start of this super cycle in commodities

the proof is in the charts

the price of copper increased almost 5 times in value from year 2000 to 2008. from 70c to $3.80

copper has held that level from 2008 to date and is currently at $3.85

the year 2000 saw the end of the rise in the $US. it fell like a stone until 2008.

it is confirmation that the $US and commodities are diametrically opposed. one rises and the other falls.

copper and gold both rose as the $US fell
copper against the $US. simple as that

FRED Chart

then we have the fred chart

it shows the control of the US Fed in action

the spike in the Fred ended in 1980. that was the end of the gold spike.

The Fed and rates had been out of control. (my theory anyway)

The US Fed then oversaw not one but two recessions in the early 1980s. it brought the economy under control . gold fell and stayed low until 2000 as everything cooled

then we have the SPX and the DOW.

the GFC in 2008 took down copper as well. for a very short time

if we go back to 1980 the 2 US recessions saw copper take a pasting from 1980 to 1982. that was the low. copper has not returned to that low level ever since

the recessions in the early 1980s were not kind to gold either. the recessions were led by governments to overcome inflation with higher rates

again it adds weight to my experience that a recession does not create a fear factor support for gold

now

where do we sit now and what is next. that is always the big picture for me

spx at new highs on a darvis break preceded by volume rise. no surprise there as money flowed back from term deposits into blue chips. I was onto that one

the reality is that rates to hold this level and then start falling this year. it should support the spx and commodities. it already has. has the market factored it in?

until when? when the recessions kick in. will recessions induced by the US Fed impact commodities and the dow

but the only counter argument is what if commodity demand increases as expected. china and the Brics pick up. The Fed is out of bullets. it cant keep raising rates and destroying households

this is the crux of it for me. if and when the Fed reaches that point where inflation increases and the Fed cant afford to raise rates gain then will gold see that 1970s spike up when oil and prices were out of control

Will it happen? hard to say. I can see it. I can taste it but the Fed is still in control.

I am waiting on next direction but in meantime enjoying the change in direction for the spx and gold etc etc

uranium was good

silver? copper? yes in time

but the media and the news flow is giving a lot of trades as the rates argument ebbs and flows over the coming months so that is where i see the action
the us election year will not see strong action by the US fed to tame the economy or create a recession so stay the course for now?
but who knows i just follow the volume of the bigger fish against my big picture background