Posted on 03/20/2008 5:05:40 PM PDT by shrinkermd
Could the commodity currencies fall further? Yes.
According to the Baltic Dry Index charts below, commodity prices will continue to fall. For those of you who do not know what the Baltic Dry Index is, it was once termed the “Best Economic Indicator You’ve Never Head Of” by Daniel Gross. This index is closely followed by all Wall Street Insiders because it is a good indicator of economic growth and production. In a nutshell, the BDI reflects how much it costs to ship raw materials (like coal, iron ore, cement and soft commodities like grains and sugar) by sea. The level of this index is also impacted by fuel costs, fleet numbers and seasonality but if the index rises, it means that demand is generally strong causing other ports to be congested.
The following charts show that the BDI is declining and could continue to decline. According to the log charts of gold and oil, the decline should steepen not only for commodity prices but also for the Australian, New Zealand and Canadian dollars. This dovetails well into my belief that carry trades will continue to suffer.
(Excerpt) Read more at seekingalpha.com ...
Kathy Lien is kinda cute.
I’ll buy gold when it hits 200 dollars an ounce..
Never bet against America.
Sure looks like the BDI missed in 2005.
There’s lots of charts that appear go up together, but are not related. I’m sure BDI calls something, but it doesn’t look like it’s gold.
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