theory..

Looking crazy for stocks at the moment but I reckon what's happening is the fed is started to panic...their reputations are on the line as inflation is rising faster than they have risen rates...thanks to greenspan who basically started too late and created a housing bubble which yanks used like an equity ATM. So now they are deliberately trying to crash the market to ease inflation. i.e. bring down commods and energy, which is working but only will only temporarily for two reasons. They are dumping gold to do it to break the apparent link between inflation and higher rates. You can tell that by seeing gold fall there yesterday and rise in asia, who are buying it instead of the US dollar. I also suspect that a gas/oil report showing declining inventories was supressed and ignored because they want to delay the bad news until next week when they report another fall. Count them again was the order, I am sure we will have more next week (after peak driving season has started) - yeah right!

But the yanks playing around with gold and US dollars isn't going to change the fact that they still need to raise rates, inflation will continue to rise, energy will become more expensive in coming months and drag commods higher as the Iran issue becomes more and more difficult to resolve and looks more and more like war is the only option. The European offer that just failed shows that's what Iran really wants. War unfortunately.

I am thinking of dumping anything I have that is not zinc, oil and gold (before we have any more bad news) to buy more zinc after any further falls. Just think of all those tanks and rifles that need rust protection in the desert, oh and the oil to drive them!

Be interesting to see how commods fair in London today. When people wise up to the fact that demand for commods and energy has not abated with the likelihood of increasing US rates, the price for them will continue to go up. Zinc stocks are dropping on average by 700 tonnes a day which leaves less than 11 months left in theory before critical supply levels are reached.

Looking at ZFX volume it looks like hedged funds have dumped but zfx dropping from 13.40 to 10.80 is not exactly significant. Weak speculators will dump it further so get use what spare cash you have or raise it now to get ready to buy by Thursday next week.