Posted on 12/08/2014 9:06:30 PM PST by Maelstorm
Lower fuel prices are compounding the longest commodity slump in a generation.
Because energy accounts for as much as half the cost to produce food and metals, all sorts of commodities will keep dropping, according to Societe Generale SA and Citigroup Inc. With inventories ample and slowing economies eroding demand, cheaper oil lowers the price floor for mining companies and farmers to remain profitable. Corn may drop another 3 percent, cotton 6.5 percent and gold as much as 5 percent, SocGen estimates.
Costs are falling as surpluses emerge in copper and sugar and as the economy slows in China, the top consumer of energy, metals, pork and soybeans. The Bloomberg Commodity Index of 22 items is heading for a fourth straight annual drop, the longest slump since its inception in 1991. Brent crude, gasoline and heating oil are the biggest losers as an increase in U.S. drilling led to a price war with producers in OPEC.
(Excerpt) Read more at nr.news-republic.com ...
Not everything is dropping. Airlines added surcharges when fuel prices spiked and I haven’t heard they’ve been removed. They also eliminated “free” dinners and lunches (they were never really free) on long flights, jammed more seats into Coach, and reduced the number of carry-ons allowed.
That's just it --meals, carry-on's, seat width, all this stuff is paid for by customers whether they use 'em or not. Personally I prefer being given the choice on what I'm paying for, so when I fly I like having my ticket price set after I say how many bags I'm bringing.
This fact is why democrats are the worst thing for the economy......they have no perception of the effect of taxes and prices on an economy.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.