The main concern is whether prices will drop all the way to long-term norms or whether Asia’s continuing economic expansion will create a floor and we’ll see a repeat of events in the first half of this year.
The good news for consumers is that gasoline prices have eased, and the timing could not have been better, as prices for most commodities still remain elevated in comparison to past standards. Although, in looking at the chart to the left, we’re nowhere near the spikes seen in corn and copper in the 1970s.
Times are tight, though. With the holidays coming up and unemployment growing, consumers need the extra cash wherever they can get it.
The iShares S&P GSCI Commodity-Indexed Trust (GSG) is down 17.5% year-to-date, and 43% off its July 2 high.