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Prices for copper, among the most used of the industrial metals, fell to six-week lows in New York at $3.56 (U.S.) a pound, driven lower on concerns global economic stimulus plans will not be able to revive slowing world economic growth.
Prices for copper, among the most used of the industrial metals, fell to six-week lows in New York at $3.56 (U.S.) a pound, driven lower on concerns global economic stimulus plans will not be able to revive slowing world economic growth.
(Konstantin Inozemtsev/iStockphoto)

SCOTT BARLOW

‘Subpriming’ of commodities poses growing risk for resource investors

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It is not an exaggeration to compare the complex derivative strategies surrounding resource inventories to the U.S. subprime mortgage crisis. We’re not kidding. Mining companies are using inventories in the same way investment banks used mortgages, the complexity level is exceedingly high and, like the banking crisis, the scale of speculation is hidden from normal accounting procedures.