Professor Copper is among the economic forecasters with the best track record. The Good Professor isn’t fazed by all the commotion in the Middle East. The price of copper rose to yet another record high yesterday. When it was around $4 eight weeks ago, I suggested that it might start behaving like a rare earth metal with a vertical ascent in its price causing it to maybe double over the next 18-24 months. There are a few other base metals that may also perform like rare earth metals, making them more precious than even precious metals.
The latest survey of manufacturing purchasing managers showed that the prices-paid component rose to 81.5 in January, the highest reading since July 2008. While rising costs had a limited impact on the fourth quarter’s earnings, more companies are warning that profit margins may narrow in coming quarters.