contrariwise

Moving to a Trans-Industrial Paradigm

"It is far from over if you can understand the basic fact that in a depression there is scarcity, and with scarcity comes increased demand and increased price. The commodity bubble is not a traditional bubble and commodities are not inflated, they are reverting to real prices based on demand."

These statements are truly bizarre. Do some research and find out what actually happened to commodity prices during the Great Depression. Farm producer prices and other commodities. Let me give you a hint: a housing bust is not good for lumber, copper and other building products related commodities. Tariffs on ethanol imports are distorting the market for agricultural commodities, creating artificial demand for inputs such as fertilizer. Oil markets are distorted by (unsustainable) overseas government subsidies. Oil is a special case because of dwindling conventional reserves and inelastic demand (in the short term). When the tariffs and subsidies go (as they must) watch out. The same things that are happening to lumber and copper prices will come to pass in agricultural commodities. Which is what happened in the 30's - farmers could not pay the freight to get their produce to market because the prices were so low. Low commodity prices. Demand destruction follows credit destruction.