http://www.forexconspiracyreport.com/united-states-recovery-drives-copper-prices-higher/ -
United States Recovery Drives Copper Prices Higher -
As exports and real estate lag in China the North American economy is expanding. Europe may be sliding into a recession tied to severe austerity measures. However, the United States recovery drives copper prices higher according to the commodity news. As United States manufacturing expands, so does the demand for copper and prices have risen to about $4 a pound. But, what does this have to do with Forex you might ask? Successful Forex trading relies upon a clear view of fundamentals and close attention to market sentiment. With this in mind let’s look at just what has driven copper prices higher. Copper futures, after all, are denominated on the NYMEX in dollars.
What is Going on in the World of Copper?
Stocks of copper have gone down recently due to increasing demand. The increasingly stronger United States recovery drives copper prices higher. On the other hand the Chinese real estate market is in its fifth month of contraction and many expect the deflation of the Chinese real estate bubble to continue. Chinese exports to Europe are down as the European economy deals with its debt dilemma by enforce austerity measures almost certain to bring about a generalized recession. With fewer buildings being built and being stocked with fewer appliances as well as with fewer exports the demand for copper is going down in China. In trading an Asian currency decline, traders will keep an eye on the picture in China. As the United States recovery drives copper prices higher we must remember that the dollar fell recently against a basket of other currencies. Thus, the rise in copper prices is in part due to better business in North America and a weakening dollar.
If the US Economy is Getting Better Why Is the Dollar Weaker?
The United States is coping with the recession by printing money. The US Federal Reserve Chairman, Ben Bernanke, is considered by many to be the preeminent expert on the causes of the Great Depression. What was going to be a bad recession got worse in the early 1930’s when the USA tightened credit instead of loosening it and when it started a trade war. At the time many viewed the Weimar Republic (German) experience as the main risk. The Weimar Republic simply kept printing money until it required a million or so Deutschmarks to buy a loaf of bread. However, if we fast forward to the current era, roughly $7 Trillion in equity disappeared during the 2008 market crash and its aftermath. Thus the US Federal Reserve has worked to keep credit flowing and inject capital into the US economy. It has been buying US Treasuries to keep interest rates low and it has been generally printing money. As we see that the United States recovery drives copper prices higher it would appear that the Fed policy has had a degree of success.
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3. As exports and real estate lag in China the North
American economy is expanding.
Europe may be sliding into a recession tied to severe
austerity measures.
www.ForexConspiracyReport.com
4. However, the United States recovery drives copper
prices higher according to the commodity news.
As United States manufacturing expands, so does
the demand for copper and prices have risen to
about $4 a pound.
www.ForexConspiracyReport.com
5. But, what does this have to do with Forex you might
ask?
Successful Forex trading relies upon a clear view of
fundamentals and close attention to market
sentiment.
www.ForexConspiracyReport.com
6. With this in mind let’s look at just what has driven
copper prices higher.
Copper futures, after all, are denominated on the
NYMEX in dollars.
What is Going on in the World of Copper?
www.ForexConspiracyReport.com
7. Stocks of copper have gone down recently due to
increasing demand.
The increasingly stronger United States recovery
drives copper prices higher.
www.ForexConspiracyReport.com
8. On the other hand the Chinese real estate market is
in its fifth month of contraction and many expect
the deflation of the Chinese real estate bubble to
continue.
www.ForexConspiracyReport.com
9. On the other hand the Chinese real estate market is
in its fifth month of contraction and many expect
the deflation of the Chinese real estate bubble to
continue.
www.ForexConspiracyReport.com
10. Chinese exports to Europe are down as the
European economy deals with its debt dilemma by
enforce austerity measures almost certain to bring
about a generalized recession.
www.ForexConspiracyReport.com
11. With fewer buildings being built and being stocked
with fewer appliances as well as with fewer exports
the demand for copper is going down in China.
www.ForexConspiracyReport.com
12. In trading an Asian currency decline, traders will
keep an eye on the picture in China.
As the United States recovery drives copper prices
higher we must remember that the dollar fell
recently against a basket of other currencies.
www.ForexConspiracyReport.com
13. Thus, the rise in copper prices is in part due to
better business in North America and a weakening
dollar.
If the US Economy is Getting Better Why Is the
Dollar Weaker?
www.ForexConspiracyReport.com
14. The United States is coping with the recession by
printing money.
www.ForexConspiracyReport.com
15. The US Federal Reserve Chairman, Ben Bernanke, is
considered by many to be the preeminent expert on
the causes of the Great Depression.
What was going to be a bad recession got worse in
the early 1930’s when the USA tightened credit
instead of loosening it and when it started a trade
war.
www.ForexConspiracyReport.com
16. At the time many viewed the Weimar Republic
(German) experience as the main risk.
The Weimar Republic simply kept printing money
until it required a million or so Deutschmarks to buy
a loaf of bread.
www.ForexConspiracyReport.com
17. However, if we fast forward to the current era,
roughly $7 Trillion in equity disappeared during the
2008 market crash and its aftermath.
Thus the US Federal Reserve has worked to keep
credit flowing and inject capital into the US
economy.
www.ForexConspiracyReport.com
18. It has been buying US Treasuries to keep interest
rates low and it has been generally printing money.
www.ForexConspiracyReport.com
19. As we see that the United States recovery drives
copper prices higher it would appear that the Fed
policy has had a degree of success.
www.ForexConspiracyReport.com
20. But, there comes a point at which the large number
of US dollars floating around reduces the value of
those dollars.
www.ForexConspiracyReport.com
21. Thus, while the United States recovery drives copper
prices higher it is partly due to the reduced value of
that same dollar.
www.ForexConspiracyReport.com
22. Whether it is the US dollar versus oil or against
other commodities a Fed policy of printing money
will stimulate the economy but eventually make
things more expensive.
www.ForexConspiracyReport.com
23. What is the Point for the Forex Trader?
We see the Chinese real estate market decline and
the fact that Chinese exports are leveling off.
www.ForexConspiracyReport.com
24. Forex traders may assume from this that the Yuan it
not going to rise continually against the rest of the
currencies of the world.
www.ForexConspiracyReport.com
25. As the US, and Europe, and the Chinese as well print
money to keep their economies going we may see
little variation in Forex currency rates but we may
see that commodities become more valuable as
denominated in any and all currencies.
www.ForexConspiracyReport.com
26. To the extent that the USA devalues its currency it
will become more competitive in the export market.
www.ForexConspiracyReport.com
27. That, over time, could help bring the dollar back to
its former dominance.
www.ForexConspiracyReport.com
28. For more insights and useful information regarding
the Forex markets and foreign currency trading, visit
www.ForexConspiracyReport.com.
