Don't Spoil the Fun of pre-1982 Pennies

All the talk about copper and how smart it is (the metal with a phD) and how the decline in U.S. housing construction is going to spoil all the fun of a pre-1982 penny having a melt value far in excess of its face value - all this leaves some of us wanting for a better explanation.

Yes, copper is getting a haircut and there's probably more to go, but with a chart like this there's plenty of room to go to the downside. Just like Florida home prices, what's 30 percent off the top when prices have gone up 400 percent in the last few years?
People are talking about inventory like it's at some sort of multi-decade high - have a look at this five year chart. The recent doubling in inventories doesn't look like much when put into proper perspective.
Then there's this chart that puts an entirely new spin on the whole idea that the U.S. is the world's second largest consumer of copper - it appears that there's a wide gap between #1 and #2.

A housing construction slowdown in the U.S. might not be quite as important in the global demand picture as it was a couple decades ago.
And what about China? Will the slowdown come this year?

Pundits have predicted a throttling back of economic growth in China for about five years now - what are the chances of this being the year?

Maybe less than you think.
Click on Mr. Pesek for the whole story from Bloomberg.

Copper is important, but the much more significant story may be burgeoning automobile production in China and its impact on oil prices.

This will surely be the year when the commodity bulls and the commodity naysayers settle the debate - there are a surprising number of very smart people who think that it's only a matter of time before we see $40 oil, and $400 gold.

Is this the end or just the beginning of the commodities boom?

By the end of 2007 we will surely know.