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Is Drop in Commodity Prices a Buying Opportunity?

Is drop in commodity prices a buying opportunity?
Todd "Bubba" Horwitz on Liberty Talk FM - Image Rotator Photo

BY: Todd Horwitz, Host & Senior Contributing Analyst
PUBLISHED: August 19, 2015

Bubba welcomes Dr. Bob Swarup to today’s episode of The Bubba Show with Todd Horwitz.  Dr. Swarup comments that a lot of tail end risk currently exists in the market; citing the problems in Puerto Rico, China and Greece as an example of such risk. Moreover, he believes all three aforementioned markets are awash in such a staggering amount of debt that as a result each respective market is extremely over-leveraged. As such, he is concerned about the latest round of currency manipulation by central banks and the fact that Japan is once again sliding into a recession.

Dr. Swarup comments that the current selloff in commodity prices should be viewed as a buying opportunity and not a selling opportunity. He believes that China is not going to be able to grow, and cites the manipulation of their equity markets as a prime example of a desperate fiscal policy. He cites the deal that the Greeks cut with the ECU and believes that they will be back at the table looking for more cash in six months.

Bubba comments he believes the central banks are running a Ponzi scheme. Dr. Swarup believes that the central banks are over-leveraged and there is too much debt in the world. He says that it is inevitable that there will be some more sovereign defaults. He believes that the banks have created so much debt that it is going to be tough to unwind that debt without asset destruction which the debt holders will suffer.

Dr. Swarup believes that the markets mirror Cosmology. The market reflects the chaos of the big bang. It begins at an infinite point of time and space and then expands. Markets are never at rest they are always moving. He also believes that the vacuum of space is really very active as matter is being created and destroyed. Just like the markets create and destroy asset values. He believes that government regulation is overdone.

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Todd Horwitz began his career in the financial industry as an option market maker at the Chicago Board of Options Exchange in 1982 and was one of the founding traders in the SPX pit. He is an active member of the am currently a member of the Chicago Board of Trade.