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Implication – Secular Bear Market
Copper’s real price reached 337 in 1974 and 330 in 1980. Each accomplished a brief
spike to the high.
Altogether, it was enough to prompt an enthusiastic expansion of copper production.
From the secular high of 337 copper’s real price declined to 95 in 2001. With some big
swings, the secular bear prevailed for 27 years.
The earlier secular high was 423 in 1916 and the exceptionally high price ran for two
years. The secular bear prevailed until 119 in 1946.
This time around, the high was orders of magnitude greater and ran for some 4 years, or
twice as long as the best previous. This is prompting a huge and very enthusiastic
expansion of copper capacity. Perhaps equivalent to the mid-1800s when the US
population growth and migration from rural to city as well as industrial expansion, was
equivalent to China’s recent history.
The above numbers are from www.thechartstore.com and earlier numbers (annual
averages against the CPI) were assembled by this writer in the 1970s.
The pattern for copper’s real price goes opposite to gold’s real price.
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