We had observed that commodities prices looked overbought, historically fell during recessions, and in recent years had been strongly influenced by emerging market demand, which looked vulnerable to a US slowdown. These observations have proven out much sooner than we anticipated. Commodities continued their fall today. From Bloomberg; Gold headed for its biggest weekly drop […]
Read more...Jeff Frankel has a good set of posts on commodities, both appearing on his blog and on Brad Setser’s (as guest blogger entries). We are featuring them together here. The first section (which was a separate post) argues that “world growth no longer explains soaring commodity prices“; the second argues that interest rates are now […]
Read more...David Roche, who heads Independent Strategy, a London-based investment consultancy, argues today in the Financial Times tha the bull run in commodities is soon to come to an end. A big factor in the outlook for commodities is whether you believe our credit crisis will lead to inflation or deflation. Bernanke’s aggressive rate cuts and […]
Read more...I don’t see a story yet on Bloomberg, but commodity prices, even gold, have fallen despite the dollar’s fall. There is a story about oil falling $6 a barrel (!) but not about the commodity price decline generally. There has been only slight recovery of the dollar relative to the yen (97.2) so this was […]
Read more...The title of this article (provided by the page editors of the Telegraph) is a tad more sensationalistic than it need to be, but the basic observation holds: the Fed has gone so far in debasing the dollar that it is starting to see serious pushback from foreign investors. This is a serious matter. The […]
Read more...Long-term supply worries, and the poor prospects for the dollar have pushed long-term oil supply contract north of $100 a barrel. This is a negative development for airlines and utilities, who buy oil under long term contracts. Although the Financial Times does not give the whole profile of futures prices, it appears some interim prices […]
Read more...Krugman, in his New York Times op-ed today, “Betting the Bank,” reminds us that the Fed is much like the Wizard of Oz: the perception of its power vastly exceeds reality. In normal times, the limited tools central bankers have at their disposal can be used to great effect, but extreme conditions reveal their impotence. […]
Read more...Today we offer two contrasting takes on the commodities market, although they are also looking at very different issues. The post immediately prior to this one, on Martin Wolf’s worries about the impact of commodities price rises, contrasts with Ambrose Evans-Pritchard’s view that in many commodities markets, the recent price spikes are driven more by […]
Read more...Martin Wolf of the Financial Tmes focuses on the question of whether we are repeating the mistakes made in the 1970s, of entering a period of inflation due to overly accommodative monetary policy. Although he hesitates to reach a firm conclusion, he sees more evidence that commodities price rises are a function more of fundamental […]
Read more...Commodity prices are falling sharply after many indexes hit new records yesterday. The cause was the belated realization that growth will be falling, easing demand for raw materials. Most observers believe the long-term outlook for commodity prices is strong, but the market looked badly overbought of late. From Bloomberg: Commodities plunged the most in almost […]
Read more...The pig farming industry in England is in crisis. From the Telegraph: Farming leaders believe that a viable domestic pig sector could be wiped out within months unless urgent action is taken by the government and retailers. The national pig herd has already halved over the past 12 years. Desperate UK pig farmers have doubled […]
Read more...Goldman Sachs and Jim Rogers seem to be on the same page as far as commodities, or at least agricultural commodities, are concerned. Both foresee a protracted bull market in foodstuff due to improve diets in the third world and supply strains. From Bloomberg: Selling soybeans at their highest prices in three decades and corn […]
Read more...