The ongoing battle against COVID-19 continues to cast doubt among many, but it appears that not everyone shares the same anxiety. Dr. Anthony Fauci holds a particularly grim view, yet public sentiment is shifting away from fear.
It seems that even the most cautious individuals are beginning to see through the veil. Many now perceive Fauci not as a reputable expert but rather as a questionable figure who has lost credibility.
Most sensible people are eager to move on, and in California, where optimism reigns, restrictions are easing. Governor Gavin Newsom, facing an impending recall election, is starting to relax the rules. He must adapt or risk losing his position.
The reopening of the economy post-epidemic—whether from a pandemic or a less severe virus—is an extraordinary moment. This is a time when the once unimaginable becomes feasible. The dream of DOW 36,000 is now tangible—though it arrives 22 years later than anticipated.
Indeed, the atmosphere is exhilarating. Optimism is palpable, everyday pleasures are intensified, and nature seems more vibrant than ever.
According to recent reports from the Commerce Department, the GDP for Q1 increased at an annualized rate of 6.4 percent, marking the second-highest quarterly growth rate since 2003, following the momentous surge in the third quarter of 2020.
However, this figure fell short of expectations; economists surveyed by Bloomberg had forecasted a 6.7 percent growth rate.
It’s puzzling that $2 trillion in stimulus funds couldn’t uplift GDP growth beyond what was predicted. Nevertheless, we anticipate that the Commerce Department will rectify the 0.3 percent shortfall in their upcoming Q1 GDP revisions.
Yet, at this point, who truly cares? GDP figures reflect the past. What insights can guide us regarding the future? Where are we headed?
Dr. Copper
To delve deeper into these questions, let’s consult a true expert—not someone like Fauci, but Dr. Copper.
Dr. Copper, the reliable indicator of economic trends, has a wealth of knowledge regarding economic direction. Its extensive application across various industries—from infrastructure and housing to consumer electronics—makes it a key early indicator of economic health.
Historically, copper prices often rise in tandem with economic activity; when they fall, economic stagnation typically follows. Over the past year, copper prices have surged more than 90 percent.
Currently, copper is trading at a 10-year high of $4.50 per pound, just shy of its all-time peak of $4.6255 per pound. Moreover, there is potential for even greater price increases.
The surge in copper prices can partly be attributed to rising demand for semiconductors and consumer electronics. Nevertheless, supply chain disruptions also play a significant role.
Recently, Chile’s President, Sebastian Piner, sparked controversy by denying workers the opportunity to make an additional early withdrawal from their pension funds. His outdated belief in the traditional use of pension funds has contributed to a global supply crunch in copper.
Adding to the issue, port workers in Chile have gone on strike to protest Piner’s restriction on early pension withdrawals, which poses a threat to copper shipments.
This situation is significant given that Chile is the world’s largest copper producer, accounting for a quarter of global copper mine production.
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So, what do these developments signify?
Dr. Copper is Talking, Are You Listening?
Copper’s rising prices have been evident long before the strike by port workers in Chile, and we believe this upward trend will persist long after normalcy returns to the docks.
Perhaps Dr. Copper is hinting at a strengthening economy, signaling the onset of a new construction boom and a post-COVID-19 era of renewed prosperity. But if you listen closely, Dr. Copper offers a more complex narrative.
Specifically, Dr. Copper suggests that inflation in the money supply leads to rising asset prices, increasing costs of commodities, escalating consumer prices, and ultimately, societal unrest.
In the past 18 months, the Federal Reserve’s balance sheet has doubled, paralleling a 90 percent rise in copper prices. What lies ahead?
Are you prepared for a potential doubling of your grocery bills in the coming year?
You should brace yourself, as crop prices are already at an 8-year high.
Undoubtedly, consumer prices will escalate dramatically during the summer months. This is when it will become glaringly clear that the post-pandemic economic recovery may be merely a façade covering rampant inflation. Copper is sending us signals, as are agricultural prices.
Gold and silver, overshadowed by the rise of cryptocurrencies, seem to be lagging behind. This underlines the importance of securing more precious metals while the opportunity still exists.
Sincerely,
MN Gordon
for Economic Prism
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