If we get GFC-2 in the coming weeks, will PMs collapse or boom?

[SilverDJ]

So in a GFC, the two metals may not be treated in the same exact way and we could see the GSR hit new highs. I'm not stating silver is without value in a GFC, but gold may be the go-to PM

Gold is always the go-to PM.

 

[phrenzy]

I put forward the theory 6 months ago that I learned in the mining industry. The theory is that commodities reflect the economy but lag its changes by about 2 years. If that is so then commodities are in for more hard times.

Can you explain the theory please? Also, how does it relate to the boom in commodities around 2010 and 2011 when the economy was doing awful (more awful than recently)?

Not being argumentative, actually interested

The theory going around is that actually it was a period within the supercycle bear market but everyone was caught short by almost unbelievable China growth, commodities boom, helped on by the Iraq war kicking oil into space and then everyone way overinvested in mines and rigs. The idea is that actually the real economy has been dying, particularly in China, and that's why demand is so low, if the global economy was growing like official US and Chinese figures suggest then we would be consuming much more iron, oil, copper and all sorts.

The thing you will hear amongst economist and big companies that have to forecast these things is that Chinese growth figures are pure fantasy. You can get an idea at the reality of the situation by looking at electricity consumption, car sales, FDI and the like. It's a pretty mixed bag province to province, but 7% is a joke that's now going to be exposed since people will have to actually look at these things to assess what's a good buy in China instead of putting money blindly into the market thinking the only way is up.