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To: Biomaven who wrote (187502)	12/30/2014 2:31:52 PM
From: DewDiligence_on_SI	2 Recommendations Recommended By CommanderCricket isopatch Read Replies (1) \| Respond to of 206093

Although increasing at a slower rate than in the recent past, China’s year-over-year growth in consumption of many commodities remains immense in absolute terms. Hence, the “slowdown” in China is a weak explanation for the low prices of many commodities, IMO.

To: Biomaven who wrote (187502)	12/30/2014 3:23:24 PM
From: robert b furman	Respond to of 206093

Hi Bio, Add one more to your list. The money center banks have been forced to give up their commodity warehousing operations per Dodd Frank. If you recall when QE 1 came about, the first thing that skyrocketed were commodity prices. Bob

To: Biomaven who wrote (187502)	12/30/2014 3:58:39 PM
From: Elroy Jetson	Read Replies (2) \| Respond to of 206093

The cost of money is extremely low for the same reason that the price of other commodities are extremely low - demand is less than supply. Economic depressions are normally so unattractive that people try to avoid the credit bubble which precede them, but such was not the case over the past 30 years.

To: Biomaven who wrote (187502)	12/30/2014 10:22:12 PM
From: Elroy	Read Replies (1) \| Respond to of 206093

My own (partial) explanation is that the very low interest rates and easy money that have prevailed for the last several years have enabled commodity suppliers to ramp-up supply faster than demand. Certainly the oil weakness is primarily supply-driven rather than demand-driven. I'd also add efficiencies on the demand side. Look at the automotive industry for example. There is a lot less steel in a car than there used to be, and much of that steel is now recycled via mini-mills instead of being new production. The average fuel economy of new cars is now over 25 MPG. Some part of the weak commodity prices also simply reflect the strong dollar. The final piece of the explanation is that the Chinese rate of growth was unsustainable. As that has now slacked off some, they can no longer make up for weak demand in the rest of the world. This all makes sense, but most of it has been ongoing for 2-3 years. Sorta hard to understand how all those things existed last summer and oil was still $90 barrel. My guess is the Saudis are actually producing more since summer in order to punish the Iranians (and thus the Syrians and their conflict) and also punish the Russians (Syrian supporters). So the economics and demand around oil and the global economy haven't changed so dramatically, but the Saudis want a lower oil price for political reasons, so they're going to make it happen. Just a hunch.