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Main » 2016 » October » 14 » When commodity prices are obscenely low, the world is not out of his mind
When commodity prices are obscenely low, the world is not out of his mind


When commodity prices are obscenely low, the world is not out of his mind

The IMF has recently released a regular report to the global outlook on the global economy. And to build a fair picture of the world on the basis of this report for investors is not recommended - render its verdict financial bloggers ZeroHedge - Materials AMarkets.




The IMF report listed a rather banal factors of global economic stagnation - low interest rates, ultrasoft monetary policy, slowing the consumption of goods and services, loss of production. Against this background it is not surprising that the raw material is cheap - it seemed to be less used to produce fewer goods. But not all so simple. We are all too accustomed to the fact that this is the norm, when shares rise (all indiscriminately of "elite» S & P500), and raw material assets subside. But the true logic of things says that the importance of resources seriously underestimated to date.


Here are the key arguments that lead experts:


* To accelerate the growth of GDP, it is necessary to produce more goods. To do this, you must increase the consumption of energy raw materials.

* Energy raw materials becomes cheaper over time - it is a myth. It is more expensive. As a readily available raw material reserves are depleted.

* Extraction of raw materials cost increases.

* The government may try to solve the problem by borrowing and zero interest rates, but these artificial tools quickly lose their effectiveness. The irregular economy "market bubbles" stocks are rising and commodity assets cheaper.

* And this state of affairs is always ends with the collapse of the stock market - "Minsky moment" comes, stocks are collapsing. Everyone is surprised. Although all have long warned.

* The collapse of the stock market leads to debt defaults, bank failures and a shortage of bank lending. At this point, the economy is slowing. Commodities update lows as demand for raw materials falls on the background of stagnating production.


Everything is simple - growth economy needs energy. Energy - a fossil. And any optimistic forecast assumes GDP growth of demand for energy raw materials and the rise in raw material prices.


Schedule. World GDP vs. consumption of raw materials in dynamics: 







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