Commodities

The prices of many commodities like corn, wheat, soybeans, copper, silver, gold, sugar, coffee, and orange juice are doing very well these days with double digit increases for many.

If the global economy is so weak, why are commodity prices rising?

I think there are two answers. Drought or poor growing conditions in Brazil and Russia, along with other countries like Pakistan and India that are experiencing flooding.

The second answer, China has become a major buyer of commodities such as copper.

I feel that the surge will moderate for industrial commodities. However, agricultural commodities will continue to increase, leading to a repeat of civil unrest as food price inflation surges.

During the next decade, I think commodities will be a major story. Oil, though not surging in price currently, will do so at the first emergence of moderate economic growth.