Scrap Metal Prices Continue to Fall

Scrap copper, aluminum, brass and iron prices have dropped dramatically during the last ten days and almost no one is counting on a quick rebound.

Investor optimism is uneasy after the 20-minute, 1,000-point stock market gyration last Thursday.  Fat fingers, computer glitches or some other mysterious caveats provide little incentive to throw investor cash into these volatile and uncertain markets.

No matter how you discect the numbers, US unemployment still hovers around 10%.

According to Zillow executives, 20% of current foreclosures are strategic walk-aways by home owners who could otherwise afford their payments, but owe more than their home is worth.

The one trillion dollar bailout for Greece and other European countries who have for years spent more than they make merely kicks the can down the road a bit.  Spain with 20% unemployment and Portugal, Italy and Ireland not far behind with their unsustainable reckless fiscal practices will place additional strain on the European Union (EU).  Expectations for growth in the EU are little to none for at least the next ten years. An increase in gross national product (GNP) for under-water economies and for most other EU partners is unlikely.

Asian countries which have been the principal buyers of US West Coast scrap metals are slowing their over-heated economies and are restraining new construction.  China and India do provide a glimmer of economic hope for investors and world commodity markets.  Although growth is expected to slow in these Far Eastern countries, they along with a select few others, such as Brazil and Viet Nam, should have sustainable economies and continue measured demand for scrap metals.

Wars of choice, such as those instigated by the Bush II Administration have cost the US treasury dearly and spent much of the national good will.  Greedy deal-making with cronies, they awarded multi-billion dollar contracts to five of the country's largest contractors to rebuild New Orleans --which still lingers on the brink.  Few dollars were spent locally or invested in local businesses, resulting in the rich getting richer and the poor getting poorer –and an unrecovered major US port city.  Retaliation rather than rational thinking prevailed at home and abroad.  The hedonistic administration dressed in cowboy boots and nearly bankrupt the US economy.

Should the US be faced with an all-out attack by a foreign power it could be at the mercy of other countries who might, or might not, sell scrap metals, such as iron, copper, aluminum and other materials to it.  With few US foundries and little capacity to produce or manufacture items for its own consumption the aging US infrastructure is expected to worsen.

If there is no acceptance of fiscal responsibility, civil unrest and riots, such as those recently seen in Greece, will expand and worsen.  If there is no demand for human respect and moral integrity, stock market chaos and economic disruption, such as witnessed last week, will become more frequent and more destabilizing.