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Commodities Collapsed Just Before The Last Stock Market Crash – So Guess What Is Happening Right Now?

by Michael Snyder, The Economic Collapse Blog:

If we were going to see a stock market crash in the United States in the fall of 2015 (to use a hypothetical example), we would expect to see commodity prices begin to crash a few months ahead of time.  This is precisely what happened just before the great financial crisis of 2008, and we are watching the exact same thing happen again right now.  On Wednesday, commodities got absolutely pummeled, and at this point the Bloomberg Commodity Index is down a whopping 26 percent over the past twelve months.  When global economic activity slows down, demand for raw materials sinks and prices drop.  So important global commodities such as copper, iron ore, aluminum, zinc, nickel, lead, tin and lumber are all considered to be key “leading indicators” that can tell us a lot about where things are heading next.  And what they are telling us right now is that we are rapidly approaching a global economic meltdown.

If the global economy was actually healthy and expanding, the demand for commodities would be increasing and that would tend to drive prices up.  But instead, prices continue to go down.

The Bloomberg Commodity Index just hit a brand new 13-year low.  That means that global commodity prices are already lower than they were during the worst moments of the last financial crisis

The commodities rout that’s pushed prices to a 13-year low pulled some of the biggest mining and energy companies below levels seen during the financial crisis.

The FTSE 350 Mining Index plunged as much as 4.9 percent to the lowest since 2009 on Wednesday, with BHP Billiton Ltd. and Anglo American Plc leading declines. Gold and copper are near the lowest in at least five years, while crude oil retreated to $50 a barrel.

This commodity bear market is like a train wreck in slow motion,” said Andy Pfaff, the chief investment officer for commodities at MitonOptimal in Cape Town. “It has a lot of momentum and doesn’t come to a sudden stop.”

Commodity prices have not been this low since April 2002.  According to Bloomberg, some of the commodities being hit the hardest include soybean oil, copper, zinc and gasoline.  And this commodity crash is already having a dramatic impact on some of the biggest commodity-producing nations on the globe.  Just consider what Gerald Celente recently told Eric King

Read More @ theeconomiccollapseblog.com

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7 comments to Commodities Collapsed Just Before The Last Stock Market Crash – So Guess What Is Happening Right Now?

  • Craig escaped from Detroit

    How many of us “Watchers” have been learning and preparing for the crash that is coming closer and closer. And how many like ME,, have been FEELING it in our souls.. MY spirit-soul-heart-gut-intuition has been feeling this NAGGING DREAD about the storm that is approaching.

    I’ve given INTELLIGENT, concise, and short,,pointed warnings to friends and family,, and of course,, only about 2 or 3 of them actually see it coming too. ALL the others (about 40 Sheeple that I personally know),, don’t YET see that they are in for a HELLUVA shock.

    I am SOoo tired of all the “Main stream Pundits-idiots” always pushing how the economy is recovering, stocks are good, no bubbles in sight, housing values increasing, unemployment at its Lowest Levels since”.. Blah blah blah,, yadda yadda. BULL SHIT Buffet,, now serving hot, steaming piles of Krappolla.

    They have ENRAGED me SO much, and ALL the idiot SHEEPLE who have brains filled with more hot steaming shit… I almost can’t WAIT for it all to come crashing down,, just so we can all say “I told you so.”

    I am looking forward to a lot of Main (shit Stream) media going BUST and all those “News Anchors” going down to the bottom of the sea,, never to be raised again. This economic ship is going down and those idiots are busy re-arranging the DECK chairs.

    I’m gonna enjoy a bit of self righteous SMUGNESS when some of those idiots (who did not see it coming and never thought seriously about it).. I’ll have LOTS of fun,, when I offer a 10 pound bag of rice for their 1 year old SUV, pickup, etc. I’ll offer FAR less for a BOAT, ATV, etc.

    I fully expect to be able to buy almost new cars for just a few ounces of silver. They’ll be crying, and I’ll remind them of all the warnings they ignored. 5 ounces (Ag) is my final bid,, take it or leave it. Move along,, NEXT sheeple in line,, step forward to be SHEARED.

    I am sad & angry that so many SHEEPLE are impossible to be woken up. Those are the ones who will wake up ONLY when all their savings are “Bailed-in”.. and their 401’s, stocks, bonds, IRA’s, jobs, cash, etc,, are worth ZERO.
    When the power grid, water system, gas grid, and stores are all shuttered,, THAT’s when the sheeple will want some answers. For them? I am a bit sad that the only answer for them,, will be the FEMA COFFINS.

    • Ed_B

      “I am SOoo tired of all the “Main stream Pundits-idiots” always pushing how the economy is recovering, stocks are good, no bubbles in sight, housing values increasing, unemployment at its Lowest Levels since”.. Blah blah blah,, yadda yadda. BULL SHIT Buffet,, now serving hot, steaming piles of Krappolla.”

      Indeed. But your comment gives me an idea. A new name for these creatures… “pundidiots”. Not as snappy as Gerald Celente’s “presstitutes” but not too bad. 🙂

  • Eric

    I was just looking at a 10 year weekly chart of Silver Wheaton.

    Where it is right now looks a lot like the washout period in late 2008 right before it bottomed at $2.50 and then soared to almost $48 over the next 2 years. If the trend remains similar to that, silver will probably trudge along the bottom here for a little while longer then soar over the next 2 years.

    The odds of them allowing it to be revalued overnight is slim if you ask me. Nobody wants to rock the boat. But you never know. I’m still holding small positions in my favorite miners with capital that I don’t need. Personally, i wish i would have been out a long time ago. And definitely wouldn’t be opening a scottrade account now, but if you’re still in them and aren’t taking more risk than you can afford to lose at this point, it could be a very exciting 2 years for the miners if we can get some momentum going.

    My favorites in no particular order… Brazil Resources, Callinex Mines, First Majestic, First Mining Finance, Tahoe Resources, Silvercrest Mines, Klondex, Silver Wheaton, Silver Standard, Fortuna Silver, Avino, and Pan American (which I almost want to dump and buy more of one of the others). I plan on adding to these positions over the next few months if they stay down here.

    If it all goes to zero tomorrow, I will laugh. Physical first in your own pocket!!! Food, Water, Medical/First aid, security and defense, etc….Then and only then…gamble with intelligence.

    • glitter 1

      I agree with you!Sure looks like a repeat of 2008/09 subsequently physical Gold and Silver dried up and the price/premiums skyrocketed.This time around the shortages are already cranking up and mine supply cranking down,so it should be a double whammy,a perfect storm for shortages/pricing.

    • Ed_B

      Mining stocks have been a real study in what not to buy in the stock market. Yes, they have great potential but little to none of that has been realized for a while now. We are often told that the mining stocks have bottomed and that NOW is the time to get in. Then, they just get cheaper. They’ve been doing this for the past 4 years now. 🙁

      It’s good that you only have money in them that you don’t need for a while. Me? I’ll just take the shiny in hand and not worry about trying to use the leverage of mining shares and just stick with physical metal in hand. I know that this is not an either / or situation and that both can be done.

      Still, while I do invest in stocks, I also know that mining companies require a LOT of careful study before one can make an informed choice. This is true of most stocks and other investments but more so with mining shares, IMO. Each to their own. 🙂

  • The Truth

    Well Snyder is correct on this one. Those who bought on margin are selling at market order knowing the carnage coming. There is no real item being exchanged. This goes to show how we are all being sheared in a rigged and corrupt system. Those commodity prices were not real but gambled up so they could fleece all of us. This is extortion and wickedness. I hope this time the entire system burns for the unjust raping of us all.

  • Craig escaped from Detroit

    Correct.. mining stocks are best (but still carry the dual risks of falling to zero and re-organization) and/or being taken over by the gov’t when the in-ground reserves become super valuable and the gov’t super insolvent.

    Other topic. All those “hunters” who think of “harvesting” wild game? Hahaha… I read a recent article about the average “ounces” of meat / squirrel.. and nature’s balance of HOW MANY Squirrels per Acre.. a person needing average number of calories,, will deplete all the squirrels in 10 acres in just a few days (if they are a lucky hunter).

    Deer hunting, has even FEWER animals per acre, and how many OTHER residents will be taking every deer they can find? The situation for “Wild meat” survival is about as likely as hitting the big Lottery jackpot.

    But I’d still like to have a 45 caliber AIR RIFLE & all the recharging extras. But I cannot justify it.

    The most efficient use of MONEY for guns,, is 1 shotgun, one Rim fire rifle, and couple of handguns.. one for concealed carry-self defense, and one for home plinking-practice-fun, etc.

    Total price,, perhaps about $1,000. (The only other additional rifle that justifies itself.. is some type of “assault” style weapon & extra ammo for the Zombie apocalypse.)

    I do own a 22 caliber Pellet rifle. This is a pretty nice thing to have.. perhaps more for “garden protection”.. but would be useful for QUIET hunting of small game,,and could take down a dog, coyote, or even a deer with a WELL PLACED shot. (perhaps a shot thru the eye-socket?)

    It’s not too difficult (with a scope) to place most shots into a 3/4″ circle at 50 yards.

    Next topic- for southern living only. The incidence of LEPROSY among Armadillos is something to consider. They are often a natural carrier for this disease. So,, if any contact with these creatures is anticipated,, wear the rubber gloves for gutting, butchering for cooking. After it’s fully cooked,,it’s safe. But all utensils must be sterilized after butchering, etc.

    I think I’ll pass up this “dish”.. but be aware that ALL animals can be infected with “variations” of “Mad Cow Disease”… (but there is some very valid research that indicates it’s NOT a “prion”..but is a MYCOPLASMA infection which can be sterilized by cooking.)
    Mad Cow variations exist in SHEEP (Scrapie), goats, DEER/Elk/Moose (CWD=Chronic Wasting Disease), and also found in Squirrels too. (the case of 3 Kentucky squirrel hunters who died from Mad Cow,,after eating squirrel meat (most likely UNDER COOKED squirrel stew, etc.)

    But if it were PRIONS only,, we’d be in BIG trouble, as they cannot be “sterilized” even at the melting point of Pb (lead). A prion may almost be described as a crystal made up of proteins etc..it’s NOT a living thing. How it multiplies,, is something like a “bullet mold” where the mechanical shape of one prion,,makes loose proteins or amino acids.. form a “new bullet”.. and it pops out of the mold,, ready to make more. Very scary, lethal biology.
    But the studies that points to “mico plasma infections” is MUCH more encouraging, and has valid points that cannot be disputed.

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