Not All That Glitters Is Gold
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Since it has been almost a year since overt QE ended, I thought it might be instructive to take a look this morning at some “commodities” and how they have fared over the past 12 months. Something tells me the next 12 months won’t be quite the same…
A year ago, when QE2 ended, commodities were soaring. Since then, not so much. With commodities, there are always other factors such as weather and geo-politics that affect price, so we have to take that into account, too. But these are “localized” phenomena in that hot, dry weather in Iowa has a great impact on corn but a minimal impact on sugar or crude. Monetary policy, however, has the power to affect things, across the board.
So, how have prices and conditions changed over the past 12 months? Let’s take a look at the big four foods: soybeans, wheat, corn and sugar. Of the four, only soybeans have held in there, unchanged in price since last June.
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