Don Coxe, Chairman of Coxe Advisors LLP, has issued a powerful new weekly review of the global capital markets, entitled, “This Time
When the BRICs Tumble The Euro is the Haven.”
In this updated conference call, Don spoke to the returning strength of commodities, the true impetus behind J.P. Morgan exiting the metals warehousing business, and what investors should be doing right now in considering commodities.
From Tekoa Da Silva, Bull Market Thinking:
Beginning at the 13:30 mark, Don noted that:
“Commodities collectively, are a cyclical bet…the CRB bottomed out in June and is up sharply since then…gold bottomed out at that time and it’s moved up to a pretty good level…$1391 doesn’t sound as good as to compared to where it was a year ago, but once again—the trend has shifted.”
“Commodities are demonstrating that there is new strength, and then we see the tremendous change in China’s imports of commodities, a record level of import in July of iron ore. We’ve seen the leap in the price of copper, and one of the things that is helping the commodity situation…is that JP Morgan has been forced by governments, the CFTC, and by the supervisors in Washington, to get out of operating their metals warehouses. The reason they did [so] was not because of ideology, but because so many congressman were being contacted by their constituents, who said ‘We cannot get the metals from the Morgan warehouses—they own these warehouses, we can’t even get aluminum,’ which is the one that has the biggest inventories of all time, [but] they tell us nine-months delay for delivery.”
“So [what] you should be doing now…I believe that you should certainly be increasing your exposure to the good commodity stocks…if you believe in stronger economic growth, and you’re not fooled by the fact that these emerging markets right now are having trouble adjusting.”
“China is once again coming through this pretty unscathed, and that means that you’ve got a great source of stability—and of course you’ve got a new player, which is the oldest of old players, Japan, to the plus side.”
“So it’s a time where you can have a greater confidence level in demand for basic materials.”
Editor’s Note: Don Coxe may be launching a subscription service soon. His conference calls and market comments are currently all free, and available at the website link below. So this is a fantastic opportunity to hear and learn from Don every week—which may not be here for very long. Please take advantage of it.
To learn more about Don Coxe (and to follow his regular work) visit: CoxeAdvisors.com