Dr. Copper Is Back…Where’d He Go For 8 Years?

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“Dr Copper” as an economic measure is becoming popular again, but where has it been the past 8yrs when the US economy has been in an uptrend since 2009 as shown by IndProd.

Dr. Copper

Commodity prices are priced in US$ globally and cycle pricing is more about the Trade Weighted US$ and global capital flows than anything else! Global capital flows are shifting back to Intl markets as the US$ foreign policy swings back towards support for Democratic institutions after a period of support withdrawal. The US$ is beginning to return to its long-term trend and commodity prices are rising as a result. Oil prices which normally rise during periods of political stress fell with North Korea’s threats as there was a brief period of capital flows back into the US seeking safety with the ‘saber rattling’. Now that fear of military action appears to be behind us, the US$ appears to be resuming its return to the long-term trend.

Dr. Copper

The fear inspired by the Russia’s Ukraine invasion, the rise of ISIS and global terrorism resulted in a sharp rise in US$ in 2014-2016. US foreign policy has begun to reassert global Democratic protections.  As investors perceive this to be effective, we can expect the Trade Weighted US$ Major Currency Index to fall another 25% from current levels as global capital flows normalize.

About the Author

Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. He holds them until that value is realized or the fundamentals change in a way that no longer support his thesis. His blog features his various ideas and commentary and he updates readers on their progress in a timely fashion. His commentary has been seen in the online versions of the Wall St. Journal, New York Times, CNN Money, Business Week, Crain’s NY, Kiplingers and other publications. He has also appeared on Fox Business News & Fox News and is a RealMoney.com contributor. His commentary on Starbucks during 2008 was recently quoted by its Founder Howard Schultz in his recent book “Onward”. In 2011 he was asked to present an investment idea at Bill Ackman’s “Harbor Investment Conference”.