According to some, the evil Wall Street speculators are behind the recent run-up in world commodity prices. However, as this chart shows, commodity prices and industrial production are nearly perfectly correlated. In addition, the middle class is growing, which means we're seeing an increase in demand for nearly everything such as
1.) Oil -- more people are driving cars 2.) Cattle -- more people want different food, such as beef 3.) Cotton -- more people want different clothes to wear 4.) Corn -- is increasing because of biofuels, the increased demand for beef (corn is fed to beef) and the increases in other grains, which typically trade in high correlation. 5.) Wheat is increasing because of constrained supply, which led to output quotas and then mass purchases to ensure adequate domestic supply. 6.) Copper is rising with industrial production
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The Bonddad Economic History Project
At the beginning of 2012, I decided to start looking at the actual, statistical history of the US economy starting in 1950. The reason is simple: to find out what really happened. So, when you see title of a post that begins with a year such as 1957, followed by "employment" or "Fed policy: you know what it's for. You can also access the information by typing in BE for Bonddad econ and a year to find information on a particular year.
Here is a link to pages that contain links to all the posts on the years listed.