Lumber always felt lonely, growing up in a forest full of trees, contrary to what you think, is not easy, he never met a Hot gal like Copper before, so when Copper complimented him by saying how Handsome and Tall he was, Lumber, for the first time in his life, felt loved and he couldn’t believe his luck that he scored a Hotty! So he ordered Dom Perignon by a dozen and they both got drunk and crashed!
Copper down a $1000 from the peak, the red hot metal losing some luster as the Chinese starting to dump their huge stockpiles. Copper is down 10% and we think it may shed another 5% or more, there is no denying that Copper will play a huge rule in the fast changing economy, but the rapid rise was fueled by unsustainable speculation and bullish bets.
Lumber likewise was one of the best commodity trades of the 2020, pandemic driven exodus to the suburbs, pent up demand and supply constrains all played a rule, but it recently emerged that the Big Builders and Traders were hoarding lumber like never before, now these hoarders are dumping lumber in the market to lock-in gains.
We strongly believe that some of the ‘housing shortage’ you are hearing about has an element of ‘speculation’ and FOMO factor playing a huge rule in the rapid rise in housing prices. These and other pockets of speculation and some real supply constraint are the factors contributing to inflation, which the Fed believe is ‘transitory’ and the Fed has been right to stay the course but remain vigilant.
Editor
Learn how 3 Chinese Robinhoods vying to lure a billion Chinese Traders
