Copper on July 6 plunged below $7,500 a ton, as increasing fears of a global recession hit the industrial metals market, lowering prices from its record highs a months ago.
Article cross-posted from our premium news partners at The Epoch Times.
The price of copper has dropped by 7.1 percent week over week, according to a Twitter post from Hedgeye, an online investment research and financial media company.
Copper fell by as much as 4.9 percent to $7,291.50 a ton on the London Metal Exchange (LMEX)—its lowest level since November 2020 after recovering to $7,552 a ton by 12:43 p.m. BST.
The mineral had already been hit by a 4.2 percent slump yesterday going below $8,000 a ton, reaching its lowest close in 19 months.
Meanwhile, aluminum lost 0.7 percent in value, while nickel was down 2.2 percent, and lead climbed 1.9 percent.
This is major turn from March, when the LMEX Index of six strategic metals rose to an all-time high after the Russian invasion of Ukraine sparked fears of global fuel and commodities shortages.
This last quarter witnessed the worse results for metals since the 2008 Great Recession, with the current month bringing little relief, as the risk of a recession dominates market sentiment.
Investors are worried over shake ups in the supply chain, such as the Russian sanctions-induced fuel crisis in Europe, a faltering American economy, and severe central government-induced lockdowns in Mainland China.
Companies hoped that China would be a major source for demand for commodities, after the CCP had promised to restart growth in the second half of 2022.
Meanwhile in America, there are also increasing concerns over the Federal Reserve’s aggressive and delayed interest rate policy, which may instigate a severe and sustained downturn, while trying to tame rising inflation.
The central bank’s attempt to curb demand is already beginning to curb U.S. economic growth.
The meeting minutes from the Federal Reserve’s last FOMC conference on June 14 came out this morning, suggesting another 50 or 75 basis point move in July.
“In discussing potential policy actions at upcoming meetings, participants continued to anticipate that ongoing increases in the target range for the federal funds rate would be appropriate to achieve the Committee’s objectives,” the minutes stated.
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“In particular, participants judged that an increase of 50 or 75 basis points would likely be appropriate at the next meeting.”
“Participants recognized that policy firming could slow the pace of economic growth for a time, but they saw the return of inflation to 2 percent as critical to achieving maximum employment on a sustained basis,” the board members admitted.
Analysts are now shifting their focus from inflation to whether and when a U.S. recession will hit, with the chances of an economic contraction now standing at 38 percent, according to Bloomberg Economics.
Falling commodity prices are a key sign that there will likely be a recession in the United States this year, according to Joe Terranova, chief market strategist at Virtus Investment Partners to CNBC on July 5.
He believes that a recession is likely to happen this year, rather than in early 2023, as others have suggested.
“It’s obvious to us that the recession conversation shouldn’t be about one in 2023,” Terranova said. “It should be about one in 2022—if we’re not already in one right now.”
Investors should keep an eye on oil, copper, lumber, agriculture, and soft commodity prices, he said, noting that they are a potential harbinger of recession, as a major drop would signal deflationary pricing.
Before every recession in the past three decades, falling copper prices have been a sign of a pending economic crisis.
“The calendar has turned into July, and the market isn’t pricing based on inflation, it’s pricing based on an expected recession,” Terranova said.
Oil prices fell in June, after topping $120 a barrel in March and April, with Brent crude dropping 13 percent at $104 a barrel today, while West Texas International crude fell 16 percent to hover just over $100 a barrel.
Lumber futures have been down at least 27 percent over the last three months, as rising housing costs and mortgage rates curb demand for building materials.
If rising inflation continues and an economic downturn hits, demand will take a severe fall.
Analysts anticipate investors rushing to the U.S. dollar as a safe haven during the period of market instability, adding further pressure.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
