The Journal of Commerce (JOC) Commodity Index that tracks the growth rate of steel, cattle hides, tallow and burlap plunged 57% in May, the most since October 2008 - something that gave analysts a sense of dÃ©jÃ vu.
In 2008, commodities nosedived when the index fell 56% to its lowest level since 1949. What followed was the greatest stock market crash since the Great Depression.
The JOC index reflects clearer signs of supply and demand than futures markets because half the items it tracks don’t trade on exchanges used by speculators, Lakshman Achuthan, the managing director at Economic Cycle Research Institute told Bloomberg News.
Burlap, used for industrial packaging, is down 9.7% this year, almost matching its 9.9% drop in 2008, while tin is down 9.5%.
Commodities extended their slump last week, led by declines in industrial metals and energy prices, as separate reports showed manufacturing slowdowns last month in China, Europe and the United States.
Copper, a commodity widely seen as an economic indicator, declined 7.4% in May, the biggest monthly slide since January. Recent reports showed the rate of manufacturing slowed in China and the United States, the world’s biggest copper users.
Now, “the collapse in the commodity index is telling us that the peak in global industrial growth is imminent, it’s here right now,” said Achuthan. “Markets are going to have to deal with the reality of a slowdown.”
Maybe it doesn’t matter how much fiat money the criminals print…