The silent crash in commodities—a warning sign

CNBC ^ | 12/9/2014 | Ron Insana

[RightGeek]

If the commodity markets were followed as widely as the stock market, the financial world would be buzzing with the news of a crash that has taken place in the value of "stuff."

While the plunging prices of oil, natural gas and gasoline are making headlines every day, thanks to the benefits accruing to consumers of energy products, the message of the commodity markets, in many ways, is hardly a reassuring one when it comes to the outlook for global economic growth.

Basic materials prices for the likes of copper, nickel, iron ore, and other industrial commodities, have collapsed, both in advance of, and now coincident with, weakening economies from Madrid to Moscow and from Berlin to Beijing. [Snip}

[RightGeek]

We're still paying top dollar for manure in Washington though.

[ctdonath2]

Plummeting value of commodities?
Or strengthening dollar buying power?

[central_va]

We suck less than everyone else?

[PghBaldy]

Either could be a major problem.

[PghBaldy]

One thing that happens when there re sudden, drastic changes in values is banks or funds or countries go under. I am thinking of 1998 (?) as one example when a bet on something (interest rates, currencies) went awry. It can be very destabilizing.

[proxy_user]

Demand in China plummeting, mostly.

Perhaps their phony bookkeeping is starting to catch up with them.

[CivilWarBrewing]

Bad timing. Silver and gold are up today.

[PghBaldy]

People do not realize how “just” a few percent loss in the wrong place could wipe out some major players.

[Straight Vermonter]

1994 Peso crisis?

[wideawake]

Where has he been? The dramatic slide in commodities has been a constant topic of conversation for over a year.

[Obadiah]

LOL! Ain’t that the truth.

[Chickensoup]

So do I cut my woodlot or do I wait.

[glorgau]

If a “few percent” can wipe out a “major player” then they don’t deserve to be “major players”. Let’s quote warren Buffett and say “you don’t know who is swimming naked until the tide goes out”

[Arthur McGowan]

I think the plummeting commodities prices are a sign of depression, but not a “strengthening” dollar. The Fed is still creating money like mad.

[bert]

-——We suck less than everyone else?—

Wow..... I went outside to see if there were stars in alignment but it is overcast

I wholeheartedly agree with that succinct bulls eye observation

[The_Media_never_lie]

The Fed is still creating money like mad.

The Fed is out of options. Will it work? We shall soon see......

[P.O.E.]

I think the plummeting commodities prices are a sign of depression

As it was in the Great Depression of the 30's.

Can't remember now if it was a precursor or co-effect - I'd have to go back and look.

[Soul of the South]

Food prices are still rising. The butcher at my grocery store today said to expect meat prices to rise immediately after the start of the new year.

[Arthur McGowan]

The deflation came first, in mid-1929. The money supply shrank 30% from 1929 to 1933.

This is not what is happening now. Real economic activity is being choked off by taxes, regulations, and THUGGERY coming from the White House. Unemployment is being made as tolerable as possible by the massive growth in food stamps, disability, etc. This is not out of compassion—it’s another way to explode the debt and discourage economic activity.

Meanwhile, the money supply continues to explode. The ultimate aim there is simply to destroy the dollar, turn it into toilet paper. The ultimate purpose is to turn the U.S. into a Third World country, absolutely absent from world affairs.

[P.O.E.]

Thanks