Friday, November 20, 2009
Here are two more charts to add to my commodity reflation recap post on Wednesday. The first chart is the Journal of Commerce index of 18 industrial commodities; the second chart is the textile subset of this same index. I think it's quite interesting that textile prices—hardly the stuff (cotton, burlap, and polyester) one might think would be the subject of commodity speculators—are at a new all-time high. This bolsters my view that the rally in commodity prices is a good indicator of global growth, and of growth that belies the cautious growth forecasts that I'm seeing from most sources. Accommodative monetary policies are also playing a role, but for now it would appear to be a secondary role.
Note: I've reindexed the values of both indices so their Nov. '01 values are equal to 100. I chose that date because that was when the great commodity price rally of the 2000s began.
Posted by Scott Grannis at 11:28 AM