Zinc's a Link for Traders Who Think

No Easy Answers

Alice Roosevelt Longworth once said, "If you can't say anything nice, come sit next to me." Card-carrying Fed bashers can say something nice about the Fed -- it's better than either the European Central Bank or the Bank of Japan.

Now that the ECB -- the hot dogs from Frankfurt -- have thrown up their hands and cut rates by 50 basis points just to be sociable, will this stimulate European industrial metals demand? Probably not, given the experiences elsewhere: Refinancing home mortgages does not chew up a lot of aluminum, does it?

What will increase metals demand and prices? An old-fashioned industrial recovery, obviously, but that just does not appear imminent. A protracted war in the Middle East will certainly consume a lot of metal in a most inelegant fashion, and may go a long way to relieving global deflationary pressures. Cry, don't laugh. Both world wars followed periods of deflationary pressure.

The replacements for Messrs. Paul O'Neill and Lindsey certainly will have some forecasting challenges ahead. They can read the tea leaves. Or they can read the steel futures.