durobinet schreef:
Toevallig krijg ik net een aardig artikel binnen van Jason Hommel o.a. over het fenomeen hedgen. Of eigenlijk over de investering in zink, maar... enfin, lees maar.
vr.gr. duro
Increased Free Market Leading to Higher Zinc Prices
Silver Stock Report
June 2, 2006
by Jason Hommel
This page can be read online at:
silverstockreport.com/email/Zinc.html
The free market is expanding to more parts of the world, and increased trade is leading to greater prosperity for more people around the world than ever before.
www.silverstockreport.com/email/Clyde...The free market (which I believe is best described as Biblical capitalism) is certainly being hindered by forces too numerous to mention, but including: paper money, usury, futures contracts, excessive government, corruption and ignorance among those in government, heavy taxes, trade restrictions, immigration quotas, welfare, minimum wages and other forms of price fixing, and government granted monopolies of patents. Due to all of this, I'm not under any delusion that the world will be dancing off into the sunset of economic prosperity of a true free market anytime soon. In fact, I think that the world will continue to reject some parts of the "unknown ideal" of the free market even after Jesus returns as King, because the Bible clearly mentions that there will be the occasional rebellion, even then, see Isaiah 65 and Zechariah 14.
But one of the essential features of the free market is that prices are allowed to change; and it is the free market price that regulates supply and demand, and not government. Higher prices are supposed to both stimulate supply and reduce demand; while lower prices are supposed to reduce supply and stimulate demand. A freely changing price best suits all market participants; because we live in a changing world, and it's impossible for one person to oversee and manage everything for everyone.
Now, I list futures contracts as a mechanism that is upsetting the free market, because futures turn things upside down. Higher prices can lead to increased investor demand; but higher prices are supposed to lower demand. This is often described as "fund buying". Higher prices can also reduce supply, if producers have hedged through futures, and locked in prices that end up being below the market price, due to inflation. Hedging can cause producers to lose money and go bankrupt in a rising price environment. (This nearly happened to gold miners Ashanti and Cambior in 1999 when the gold price quickly rose $70/oz.!) Foolish producer hedging also greatly upsets the workers, who rightly feel that they should be able to benefit from a rising market price. Worker strikes were recently affecting Industrial Penoles, who hedged zinc at about $1000/tonne, while zinc has traded as high as $3500/tonne.
Futures contracts are "rationalized" and "justified" because they are supposed to reduce price volatility, but instead, they increase it! Futures contracts are also "rationalized" because a business in debt needs to be able to lock in prices for something that they may need to either buy or sell in the future. But, again, debt itself is contrary to how Biblical capitalism is supposed to work; as people should not be in debt. Futures markets also drain away money that could otherwise have been allocated towards investing in production, instead.
Very wealthy traders can also use futures markets to reduce price volatility, and manipulate prices, by selling or buying far more of the commodity that may exist, and they can get away with this manipulation for years. Paper money is also a manipulation, because it allows "very wealthy traders" to exist in the first place. And when paper money is created at a governmental level (such as with the Federal Reserve), and when this is used to manipulate prices (such as with the exchange stabilization fund, or Plunge Protection Team), this is really not much different than communism itself.
But as bad as things are; things are getting better for more people around the world, especially as communism has collapsed in Russia and China, and as trade increases. And prices are certainly changing rapidly, especially in commodities and precious metals--which is better than stagnation, manipulation, and shortages -- which are the end result of communism.
But under communism, nobody benefits from shortages. People just have to wait in long lines, or do without. Under the current slightly more free so-called "free market" system, we can benefit from shortages, through investing, and this is our opportunity.
A world-wide zinc shortage is looming, if not already here!
And you must act quickly, before other investors, to benefit the most from the looming zinc shortage.
The LME (London Metals Exchange) has 8.2 days of zinc inventory, and at current rates that these stocks are being drawn down, the LME will be out of zinc by November, 2006 -- unless zinc prices rise substantially to cut back demand, of course.
Clearly, zinc prices must rise until industrial demand decreases, or zinc supply increases. But prices may rise a lot because zinc is primarily used in galvanized steel, and zinc is a very low cost component of galvanized steel. Zinc prices may also rise a lot because zinc supply cannot increase significantly in the next two years, as that is how long it takes to bring major new zinc mines into production. Zinc prices may also rise a lot due to the turbulent futures markets that can create both the prior downside price manipulation, in addition to a massive over-correction to the upside, along with massive price movements; both up and down, within the next two years.
Recently, copper prices moved up 12% in one day; while bonds pay less than 6% in an entire year!
On May 11th, precious and base metals paused from their roaring uptrend, and began to dip.
Zinc hit a high of $1.72/lb., and quickly dipped to $1.45/lb. But zinc has already shown the greatest strength, as it climbed back up to $1.70 again earlier this week. Even today, zinc has shown the greatest gains among the base metals, and is up 4.5% to $1.60/lb.
The annual world consumption of zinc is 10.7 million tonnes.
Source:
www.ilzsg.org/ilzsgframe.htmThe stockpiles of zinc at the LME are rapidly declining; and stand at 240,000 tonnes.
Source:
www.kitcometals.com/charts/zinc_histo...10.7 M tonnes / 365 = 29,300 tonnes/day of world zinc consumption.
240 KT / 29.3 KT = 8.2 days worth of zinc, stockpiled at the LME.
At current draw down rates (240,000 tonnes in the past 6 months) LME stocks will be exhausted by November, 2006.