I noticed that the TSX went down 90 points today 4/7/11 and I thought this is an outlier. If the world is going into stagflation, then why would the TSX of all commodity related exchanges go down today … not a big deal at -90 points but it begged the questions:
Will the collapse of Japanese supply chains do two things:
Stop industrial production worldwide?
Stop commodity imports worldwide?
Kill the silver rally?
The relationships do fit. The TSX was merely a catalyst for these questions, which I submit here.
Firstly, do you all know that the Japan crisis is out of control? Secondly, it’s in the Middle of Japan geographically. Third Japan makes parts for half of everything you use (I’m guessing), and since these parts are used in everything, then… world contamination of parts, if Japan is worse than anyone thinks, is coming.
We will get simultaneous price rises in all products, with a drop of imported materials of all kinds, to start with.
Then, who knows how, but I would think plants would resume due to shortages in supply chains, but with breakages.
This supply chain situation is incredibly complex, and might just result in a crash in the commodities for an initial period of time due to interruptions of the production cycles.
Disclaimer: Chris Laird is not an investment advisor/professional. This article, and the PrudentSquirrel newsletter and alerts, are general market commentary only. They are not intended as specific advice. You should talk to your own investment professionals for specific advice. Information here is deemed reliable but should be verified by you if you think it’s important.
