Commodity Prices Signal More Tough Times Ahead

The signers of the Declaration of Independence pledged their "lives, fortunes and sacred honor" to the cause. We're all probably a little more aware of the value and fragility of life than we were just a few weeks ago, and most of us, alas, are now a little lighter in the fortune department.

Sacred honor is not as irretrievable as life, but once lost, it's difficult to recover. This struck me while reviewing a piece I wrote in April on the negative macroeconomic implications emanating from the base metal complex, which includes copper, aluminum, zinc, nickel, tin and lead.

At the time, various members of the Federal Open Market Committee were traversing the countryside to defend their lower-than-hoped-for rate cut of 50 basis points on March 20. I noted then that the "recent spate of comments from various members of the Federal Reserve telling us things aren't all that bad in the face of a steady stream of evidence to the contrary risks a long-term loss of credibility for that suddenly embattled institution." ...