Question:
Why should we be concerned about the recent copper price decline when copper
went down for years in the late 1990s?
Answer:
Most of copper's losses in the '90s were in the economically soft early part of
the decade and again during '97-'98. You’ll recall that the Asian
currency crisis beginning in ‘97 was part of the problem since overseas copper
demand was impacted by this. By 1998, the Asian (and Russian) chickens
came home to roost in the U.S. and we had that nasty mini-deflationary
commodities collapse (or near collapse) in the summer of ‘98 along with the
shortest equities bear market on record (22% in two months if memory serves).
It
may take a few more months, but I suspect we'll eventually see China/Russia's
troubled waters rippling our way – just as they did in ‘98.
