Oil and Gold Prices Continue to Plummet

[underpants]

Source: NY Times

The plummeting price of oil and gold on Thursday provided relief for consumers concerned about inflation, even as some investors wondered whether one of the last safe spots in a tumultuous market was beginning to collapse.

But on Thursday, those markets were in free fall. The price of crude oil and gold fell almost 10 percent in less than 36 hours. Gold, which recently crossed the $1,000 mark, slid to nearly $900 a troy ounce in overnight trading. Futures contracts for crude oil were trading below $100 for the first time in more than two weeks.

Wheat, sugar, corn, copper and platinum also dropped. “These are all significant declines,” said James Steel, a commodities analyst at HSBC.

The retreat from raw materials has occurred as the dollar, weighed down for months by inflation fears, staged a comeback against the euro and the yen. Investors who viewed commodities as a shrewd hedge against inflation are scrambling to get out of their bets. And the speculation is playing havoc with prices for products that are absolute necessities for consumers across the world.



Read more: http://www.nytimes.com/2008/03/20/business/20cnd-commodity.html?hp

[2Design]

1. yea - lets help the little guy by lowering consumer prices -

enough bailing out investment 6 figure salary people and throwing the rest of us under the bus

[Occulus]

10. A single bag of groceries,

including beer and a small bottle of whiskey, along with ingredients for a kick-ass salad and breaded fish for dinner, cost me

$48

yesterday.

That's one paper bag.

:grr:

[joeglow3]

12. No offense

But wouldn't you consider beer and whiskey a luxury?

[KansDem]

14. I don't...

:9

But then, I consider cable TeeVee "a luxury." I suppose one man's luxury is another man's necessity.

[guitar man]

20. blasphemy!

beer and whiskey are necessities, they are what has got me through 7 years of *bu$h so far....

[Pharaoh]

24. I needed to move up to

Martinis this year!!

[Javaman]

29. In this economy the are a necessity. lol nt

[Clear Blue Sky]

2. Day traders and market timers beware...

It's not as easy as it looks...

[nels25]

3. I do not know squat about how the markets really work

but this sure sounds like positive news to me!

[Mojorabbit]

5. I think it is the big

players liquidating to cover margin calls and will be temporary.
http://africa.reuters.com/business/news/usnBAN022350.html

[notadmblnd]

4. I bought milk at 2.50 a gallon yesterday

That was a surprise.

[whistle]

7. Where? Here in Orlando FL a gallon of milk was $3.99 at Publix down from $4.49 two weeks before

[joeglow3]

8. I just paid $2.40 a gallon

Of course, I do live in Nebraska.

[whistle]

22. Like taking coal to Newcastle, however Florida has dairy farms also

...don't get me wrong, farmers have to make a living and consumers should pay enough to cover the cost of production, processing and distribution. But, there is certainly something wrong when milk here in the state jumped from $2.49 per gallon retail less than 18 months ago up to $4.49 at the beginning of the year and now is being used as a lost leader in retail stores to get customers in the door by advertising $3.99 specials.

[notadmblnd]

9. Michigan. It's been running around 3.49

[joeglow3]

6. This is not a shock

There IS a reason for these commodities to rise. However, like most things (stocks in the late 1990's, real estate in the last 5 years, etc.), speculators and people hoping to jump on the new hot thing jump in, causing a short term spike. Inevitably, the products will settle back down to their intrinsic, long term value. The recent runup in gold was exactly this.

[Betty]

11. but prices at the pump

will continue to skyrocket, I am sure of that.

[darue]

13. looks like 'profit taking' to me....

gotta sell at some point, best to time it with other big players, that drives the price down temporarily, then you jump back in and drive the price up again...

One interesting question, what currency are the sellers receiving for their commodities?

[politicaholic]

16. You're right. Btw...

the currency is based on the commodity market with which they are dealing.

[Up2Late]

15. Good, but it also sounds like another psychological victory for the Fat-Cats in the markets...

...Why, think, "Gosh, I just hope we see $80.00 a barrel Crude Oil soon! Sounds good, right? Well think what it would have sounded like LAST March when the price was $60.44 per barrel!

Don't believe me? Check it out: <http://tonto.eia.doe.gov/dnav/pet/hist/rwtcM.htm>

[LeftHander]

17. But they marked up the price 30% before they annouced the "Sale"

It is still costing us more.

[librechik]

18. yes--Sucker rallies can't happen unless there are

corresponding price dips.

[Dogmudgeon]

19. Pump! And! Dump!

--p!

[khaos]

21. great time to buy.. the commodity rally is far from over

[smoogatz]

23. The reason prices on some commodities are falling is fear of global recession.

Not, as the Times suggests, simply because inflation fears have eased. Less economic activity globally means less demand for oil, etc. As we learned in the 70s, you can have a stagnant economy and high inflation at the same time, and that's exactly where we're headed.

[plasticsundance]

25. What nonsense

Gold has made these kinds of adjustments for the past four years, but the overall trend is that it's going up ... and that will continue ... because whether it's a Democrat or Republican the economic policies of the United States has run the gambit, and the smart money will return to a safehaven, or what is called a reliable "store of value."

Consider that in 2003, gold was $325 - $350, but is now at $912. Do you get the picture?

In 2004 oil shot up to $40 - $45, and we were told back then not to panic because it would go back to $36. It is currently at $101.

The dollar is on life support, and it's not going to survive a government imposed economic bailout either to big corporations or the consumer.

We're fucked, and so is every desperate attempt to retain our hegemony. Right now there is obviously messing about with the commodities to prop up the dollar, and the effect has virtually been nil.

[Speck Tater]

26. Volatility is a sign of chaotic systems. NT

[central scrutinizer]

27. The dollar is dropping like a rock

My daughter left for Chile to study abroad one month ago. At that time, one dollar would buy 470 Chilean pesos. Today, about 5 weeks later, it will buy 438 pesos. That is about a 7% drop.

[cascadiance]

28. The bottom line is that real wages need to rise and keep pace with inflation!

And perhaps for a short time in the near future *exceed* the rate of inflation to get the balance and health of our economy restored again. It is the shrinking buying power that is pushed on us from many directions of what we are making that is causing our economic (and dollar) collapse. We need a new "New Deal"!