The chart on vanadium, a metallic element used for hardening
Steel, below is notable because the vanadium prices have been in decline, a completely opposite trend to what's been seen in so many other commodities.
The divergence between vanadium and other commodities can be found elsewhere whenever comparing tradeable commodities, or those that a speculator can trade on an organized exchange, and commodities such as vanadium (titanium, and many others) that can only be bought in its physical form in the spot market.
The point is that the divergence between price trends in tradeable commodities and commodities that can only be traded in the spot market clearly shows that there has been a large amount of speculative fervor driving recent price trends.
This is obvious in the price run-ups, but the divergence implicit in the attached helps to illustrate the depth of the speculation.
Sources: Metals Bulletin, Bloomberg
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Tony Crescenzi is the chief bond market strategist at Miller Tabak + Co., LLC, and advises many of the nation's top institutional investors on issues related to the bond market, the economy and other macro-related issues. At the request of the Federal Reserve, Crescenzi is a regular participant in the board's Livingston Survey of economic forecasters. He is also the author of The Strategic Bond Investor. At the time of publication, Crescenzi or Miller Tabak had no positions in the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Crescenzi also is the founder of Bondtalk.com, a popular Web site covering the bond market and the economy. Crescenzi appreciates your feedback; click here to send him an email.
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