A Rocky Economic Road Ahead

I do some scraping in My spare time. Scrap metal , steel, cast iron has already dropped from $360.00/ton in august to $60.00/ton today 10/26/08.

oilcan13

In Sudbury, Ontario Canada we watch nickel prices pretty closly due to Sudbury being a hard rock mining hub of Eastern Canada. The price for nickel has fallen by 75% from a year ago. Two mining companies closed up shop last week and laid everyone off.

In north Ga. Stainless is down to around .10 cent a pound from .78 cent 3 months ago and as high a 1.50 per pound a year ago. Most of the scrap people have quit taking carbon steel and cast iron at any price. Also I think copper/brass has fell over 1.00 per pound in the last few weeks. On the bright side it keeps the drug addicts from stealing any thing metal that is not nailed down. A few months back you had to wait in line to even sell scrap now it is like a ghost town around the scrap yards. We had a company that was cutting down old tanks in our mill for free just to get the scrap. They laid everyone off and left our paper mill last week. I have heard that the prices fell because the Chinese have quit buying up scrap. Not sure if this is so but I do know nearly all of the scrap around here was being sold to the Chinese or other countries over seas.

pipewelder

The US of A should never have dropped the Gold standard of having a reserve that actually backs up the paper money. You can thank Nixon for that blunder as well as the allowance of private insurance companies and hospitals. What a nightmare.

Greedy politicians and bankers caused all the financial probems to begin with back in 1971 when Nixon changed the rules. You're all screwed now.....

Huh? When were you born?

If the U.S.S.A (United Socialist States of America) and the rest of the major world economies were still on the "Gold Standard" it would be a very different world. Not necessarily better but different.

Imagine a country where every dollar was backed by gold held in the country's National Bank. It would then be totally dependent on what the world saw as the value of gold.

What use is gold really good for, electrical contacts, corrosion resistance and decoration as in jewelry. Is this what we want to base out economic future on?

Currently the value of a national currency is based on the world perception of what that country is worth in terms of how well the country looks after its nationals, how likely it is to be able to pay its debts on time, how desirable it is to trade with them and how well do they respect international laws.

Is this that different to a "Gold Standard"?

You may be interested in the back ground behind the worlds changing financial standards. Try this link. Bretton Woods Conference It is a good spot to start a sit is where a period of rapid financial change started. Before that it was much slower, much like the difference between "Post Riders" (Pony Express) and the Fax machine or internet.

BAB

You're absolutely right. We should have let that noble and courageous lion of the western world, mssr Chas.deGaulle set the tone for the western world. ...

Actually, At the rate that we create real wealth, I'm not sure how much gold we would need to cover currency. (not derivatives!)

Perhaps we Might as well use silicon...

In SoCAL clean air would be even more precious...

milo

Metal prices are down around where they were 4 years ago. It's bad for recycling centers who bought material high and are selling it low. Or the manufacturing businesses who did the same. However it is much better for the economy that these prices stay low. Manufacturing companys can buy their material at a much lower rate thereby being able to sell their finished product for less and increase sales, which will in turn increase employment. When the Metal Market was high manufacturing businesses were having to lay people off, raise product prices and/or cut costs elsewhere to make up the difference. You can sell stainless for about $.10/lb, aluminum $.40/lb, steel $.02 or less and copper for around $.90/lb and this is not the lowest point. Metal prices look to decrease even more next month! I don't see a change until either after the election or the first couple month of 2009.

Scrapper

The thing that ticks me off about the scrap prices going down is the other side of the coin. The steel companies drag their feet on lowering the new steel prices to the very last moment I guess hoping it will turn back around. I buy a good bit of new steel for my shop. I used to buy a little extra each time I bought steel to keep a little stock on my racks for quick jobs and emergencies. The last couple of years though the steel prices were so high I really couldn't afford to do this. I recently (before the steel and diesel prices started dropping) ordered a small quantity of steel knowing that I would have to order a little more than I needed (100.00 min order) to be able to get it delivered. I think the whole order was around 170.00 and the guy at the steel place said it would cost 75.00 to deliver it if I didn't buy at least 300.00 worth. He told me that the min order went up because the high cost of diesel fuel and even though the truck passes right near my shop every day it was not profitable to stop and make the delivery. Well now since fuel has dropped nearly 2.00 per gallon they still haven't lower the min. order back to 100.00 and I don't believe they are ever planning to. I guess it is time to start looking for a new supplier but the bottom line is that I've been very satisfied with this company for over 10 years now. So sorry for the rant but sometimes things really seem to suck and it is hard not to get on a soap box.

pipewelder

look up oligopoly and or kinked demand curve to understand the steel companies uhh reluctance... to lower prices.. same with oil.

milo

I did well, I sold most of my scrap metals when it was high. Now I will buy scrap for my projects low. As much by luck as by plan. My overhead just went down dramatically.

As for non backed currency- The biggest con game going. The 700 billion dollar bail out just devalued the existing currency by 700 billion times 9 with fractional banking. A house of cards based on a paper scam.

Short term keep your cash, long term when commodities hit bottom or currency sarts diving buy the hard commodity not the paper saying it is a commodity. The paper don't even burn well, has a chance it will not feed you, and may not have any value. Currency is designed to inflate faster than a bank pays a return on it. Pick a commodity you can trade for consumables.

This way if the economy picks up you win, if it goes to $#&& you have a good chance of being able to have some control of your circumstances.

bwire turned me on to this http://www.video.google.com/videoplay?docid=7065205277695921912 (sorry, link no longer available) and it has a lot of the information I found from other sources.

Brad

Do not look to government to solve the problems, because the government created the problems. When free markets stop being pushed into fear and panic by politicians our economy will level out and remain strong.