 COMMODITIES AS A “HEDGE AGAINST


INFLATION”  Japan, facing the oldest demographics in the industrial world where future pension obligations would outstrip   US and UK (but not Europe)


Personal investment in Japanese equities and real   


US rates were cut to cushion the blow and, by 1993 the US economy was leading a global recovery and the Fed’s Alan Greenspan was promising higher rates and recommending commodities as a hedge against 


With the LME on price lows in 1993, drowning under  hit 2.67m Mt in April 1994), the arrival of these new investor buyers was well timed.


IT TOOK A WEAK EQUITY MARKET AND LOW INTEREST RATES IN 2003 TO ENCOURAGE LONG TERM INVESTORS TO REALLY BUY INTO THE COMMODITIES ARGUMENT.


 metal fundamentals, with the average correlation of LME metals to copper being around 40% from 1990-93. By early 1994, with new speculators buying LME metals across the board, the average correlation  retained a tendency for prices to move in sync.


Funds were important to price action in the 1990s, but other players also   and closed out by his employers causing a dramatic copper price collapse   


  modest and it wasn’t until 2003 that the real weight of fund money would be felt on the LME.


21 | ADMISI - The Ghost In The Machine | May/June 2019


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