Wednesday, November 17, 2010
Burlap Price and Global Inflation
A brief article buried in the inside pages of the Wall Street Journal on Nov 17 mentioned a recent price surge in two indexes of obscure raw industrial commodities, which might be seen as a predictor of future inflation. But it also could be seen as a predictor that global industrial growth is about to recover in early 2011. These two indexes, The Commodity Research Bureau's raw industrial spot index, and the Journal of Commerce-Economic Cycle Research Institute industrial prices index, both track price movements in things like burlap, tallow, hides, cotton, lead, plywood, etc. And both of these indexes are now at or near all time highs.
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I was interested to read in a recent New Scientist that large areas of the world are becoming non-productive for wind energy due to re-forestation. They report that large areas of abandoned Russian farmland are growing trees. Now NS does not always have the best data, but this ties into the Russian grain shortages.
ReplyDeleteGood point. Yet no one abandons grain fields that still produce grain.
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