Market notices that natural resources are shrinking fast
While some folks in political circles still like to pretend that natural resources are endless, global financial markets aren’t, uh, buying it. Commodity prices recently hit a 24-year high, driven by worries that burgeoning global demand is rapidly outstripping supply. We’ll try to spare you most of the numbers (masochists may click the link below), but suffice it to say: Copper and oil prices are near record highs. Countries that export loads of raw materials (Australia, Canada, South Africa, et al) are loving life as their currencies rise against the dollar. Continuing economic growth in the U.S. and China means that prices will probably continue to go up, and “[t]he only thing that will get us to move decisively lower is a global recession that would reduce demand,” said Citigroup analyst Kyle Cooper. Analysts at Lehman Brothers Holdings Inc. said oil prices will rise until 2008 and stay high thereafter, based on worries that global oil production is reaching its peak. Hmm … seems like the Birkenstock crowd has been saying that for a while.