Jump to content
House Price Crash Forum
Sign in to follow this  
CleverBear

Commodity Prices Tumbling

Recommended Posts

Silver lining to a worsening economic outlook?

It would be really nice if we could have inflation fall back sharply due to these commodity falls (i.e. corn, copper, oil etc).

Anyone know how long it will take generally lower commodity prices to feed through into what we pay in the shops?

Share this post


Link to post
Share on other sites

Silver lining to a worsening economic outlook?

It would be really nice if we could have inflation fall back sharply due to these commodity falls (i.e. corn, copper, oil etc).

Anyone know how long it will take generally lower commodity prices to feed through into what we pay in the shops?

The cynic in me would say forever - companies will use it to (re)build profit margins and profits given lower volumes they are now struggling with.

Share this post


Link to post
Share on other sites

The cynic in me would say forever - companies will use it to (re)build profit margins and profits given lower volumes they are now struggling with.

Thats where competition comes into its own surely!

Share this post


Link to post
Share on other sites

Silver lining to a worsening economic outlook?

It would be really nice if we could have inflation fall back sharply due to these commodity falls (i.e. corn, copper, oil etc).

Anyone know how long it will take generally lower commodity prices to feed through into what we pay in the shops?

You should be on the stage. :lol:

Oil is down 15% since April but fuel and energy prices have gone up.

Share this post


Link to post
Share on other sites

Inflation would fall, all the way into deflation, if it weren't for one thing: printy printy...

Well that fed action wasnt too bad for those of us who hate inflation. What is espicially good is that the republicans are putting massive pressure on the fed to not do more stimulus. Also the fed had difficulty even getting this action through its commitee. i cant see them being able to launch a full fledged printy printy QE3

Share this post


Link to post
Share on other sites

Well that fed action wasnt too bad for those of us who hate inflation. What is espicially good is that the republicans are putting massive pressure on the fed to not do more stimulus. Also the fed had difficulty even getting this action through its commitee. i cant see them being able to launch a full fledged printy printy QE3

And it is this that makes the hyper inflation often discussed here seem less likely. I guess this is why everything is falling in unison today, including gold. The Fed has no more bolts left to shoot.

It could be that we'll see a marked drop off in inflation as governments refuse to provide more stimulus and increase their own debt.

Or it could be that we get a sharp bust and that makes governments think even more radically about printing, to the point that they print without going through the hassle of buying bonds and making repayments... markets plummet, panic ensues, "we have to print to save the world" sort of thing...

Happy to be corrected on any of the above, just my very amateur economic thinking.

Share this post


Link to post
Share on other sites

Silver lining to a worsening economic outlook?

It would be really nice if we could have inflation fall back sharply due to these commodity falls (i.e. corn, copper, oil etc).

Anyone know how long it will take generally lower commodity prices to feed through into what we pay in the shops?

Have no fear, more money printing should keep the danger of a lower cost of living at bay.

Thanks to our heroic central bankers and fully paid for politicians, no one will have to suffer cheaper food, home heating oil or petrol as their income looks less certain or evaporates in the recession.

Share this post


Link to post
Share on other sites

The Fed has no more bolts left to shoot.

Why do people keep saying that? The United States still uses the dollar and the Fed can create unlimited quantities of them with zero resistance from the politicians. That's quite a bolt!

Share this post


Link to post
Share on other sites

They are falling because in a sudden market drop you need liquidity. You can only get that in a plunging market by selling something someone actually wants, i.e. your good stuff, i.e. commodites inculding gold.

These sudden drops gives buying opportunities for good assets, and yes, gold and excellent blue-chips (which there are a few).

Share this post


Link to post
Share on other sites

They are falling because in a sudden market drop you need liquidity. You can only get that in a plunging market by selling something someone actually wants, i.e. your good stuff, i.e. commodites inculding gold.

These sudden drops gives buying opportunities for good assets, and yes, gold and excellent blue-chips (which there are a few).

I bought today. I tend to trade in ETF trackers and just buy when the market collapses figuring there must be some overeaction in there (human nature) and thus my buy will be a good bet.

Share this post


Link to post
Share on other sites

I bought today. I tend to trade in ETF trackers and just buy when the market collapses figuring there must be some overeaction in there (human nature) and thus my buy will be a good bet.

At some point in the next month or two certainly, as long as your exit profit covers your dealing costs, which is less certain for the normal investor.

Share this post


Link to post
Share on other sites

At some point in the next month or two certainly, as long as your exit profit covers your dealing costs, which is less certain for the normal investor.

True. No stamp duty helps. I dont think its worth investing under £5k in most stocks/etfs. Otherwise commision just eats you up!

Share this post


Link to post
Share on other sites

Dont worry though, the pounds tumbling too. Down from 1.64 dollars to the pound a week or so ago to 1.54 to the pound today.

So Posen and Blanch******wit can sleep easy, there should be no evil deflation here and the British public can continue to enjoy record high prices.

Dont watch the pound against other currencies than the dollar, so its probably a case of the dollar strengthening a little, than commodities tumbling (people getting out of pound and euro?)

Share this post


Link to post
Share on other sites

Silver lining to a worsening economic outlook?

It would be really nice if we could have inflation fall back sharply due to these commodity falls (i.e. corn, copper, oil etc).

Anyone know how long it will take generally lower commodity prices to feed through into what we pay in the shops?

Depends on the product

Some don't filter at all (the businesses in the chain eat the cost/profit)

Others will be almost instant.

Generally speaking a good rule of thumb for a big basket of goods is that the base material make up 10% if the final cost.

So a 20% swing in corn prices would impact your popcorn price by 2%.

Share this post


Link to post
Share on other sites

Depends on the product

Some don't filter at all (the businesses in the chain eat the cost/profit)

Others will be almost instant.

Generally speaking a good rule of thumb for a big basket of goods is that the base material make up 10% if the final cost.

So a 20% swing in corn prices would impact your popcorn price by 2%.

Thanks.

Presumably you have to add in the effect of oil prices on transport and packaging after that too though?

Share this post


Link to post
Share on other sites

Silver lining to a worsening economic outlook?

Are you being ironic? Silver down over 8% on the day.

What is espicially good is that the republicans are putting massive pressure on the fed to not do more stimulus. Also the fed had difficulty even getting this action through its commitee. i cant see them being able to launch a full fledged printy printy QE3

+1

Share this post


Link to post
Share on other sites

Printy printy, QE blah blah blah. For once I'd like to see a truthful headline like today the boe announced it will be stealing 50billion pounds from the people in order to prop up the banks that overextended and to pay their bonuses.

Share this post


Link to post
Share on other sites

Disagree. But of course I could be wrong.

Best policy may be to buy metal mining stocks next. First up is a falling pound against dollar - that indicates to me a big fallout on the markets and may go on for a while yet. The markets sell into dollars and then look for some other safer place. So, perversely the dollar rises as it did in 2008 until the alternative investments are arranged. Then it will fall back sharply too.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 331 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.