As was easy to forecast given the recent relentless money-pumping on the part of central banks like the Federal Reserve and ECB, commodity prices are beginning to soar.
Chris Becker of Australian blog MacroBusiness writes, “[A]lmost every major primary product [is] putting in yearly or even decade highs.” With each sentence accompanying a graphic illustrating his point, Becker continues: “Iron ore is cracking through an 11 year high, about to spike through $200 spot prices. Crude oil is almost back to its pre-COVID highs, tripling in the process. Meanwhile copper has more than doubled since crashing below the $2 level at the start of the COVID pandemic. Other soft commodities are going ballistic, with lumber prices at record highs. And wheat also shooting higher. The Baltic Dry Index has recovered and then some from the sideways stuck Suez situation, now breaking out to a decade high.”
John Mothersole, pricing and purchasing research director of the IHS Markit Materials Price Index, is now forecasting consumer price inflation in the United States: “The surge in commodity prices over the past year now guarantees higher goods price inflation this summer. Indeed, during the next few months even top-line consumer price inflation in countries such as the United States will rise to rates not seen in nearly ten years.”
