maandag 28 mei 2012

Agricultural Commodities Break Down, Start of Another Great Depression?

When we take a look at history and go back to the Great Depression, we find that agriculture is a leading indicator for the economy. During the recession in 1930 we saw that agriculture prices declined very rapidly (for example cotton prices dropping 18% in just one week). A few years after that, the Great Depression initiated at full force with bank deposits being frozen. This started the Great Depression of 1932.

Today, the same is happening with agricultural commodities. Cotton dropped 10% in 1 week and is now down 20% in two weeks time. All other agricultural commodities have been very weak since the start of 2012 with the exception of soybeans.  The CRB index has also hit a new 2 year low.

Weakness in agriculture today is the evidence that the Great Depression is now being repeated. The only commodities that went up during the Great Depression were gold and silver, along with the gold/silver mining shares.

I will analyze 8 key agricultural commodities here: Agricultural Commodities Breaking Down, Start of Another Great Depression?

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