While it may have very little on effect on the actual goings-on of the world, we are always interested in what the prognosticators might say about debt crises and their effects on commodity prices. On one hand, a faltering euro leaves only the dollar as a “safe” currency—meaning the debt crisis in Europe is good for the dollar and bad for commodity prices. But any deep analysis will show the entire system build on faith in fiat is deeply flawed—and destined to collapse.
A big component that analysts have failed to recognize is that the ecosystem of largely European banks that once lent essential short-term loans to commodity projects has failed. In today’s Financial Times Commodities Note, commodities analyst Javier Blas says this: