A number of friends have recently approached me asking the best way to refinance their home.

Should they be ultra conservative and lock in a historically low 3.9% conventional fixed rate 30-year loan? Or should they throw caution to the wind and be seduced by a 5/1 ARM (adjustable rate mortgage) available for half the monthly payment?

I tell them that the answer is obvious. All they have to do is closely watch the iron ore market for Chinese delivery.

Last week, the price of this principal raw material for steel fell to $43.5 per metric tonne, the lowest since the 2008 crash, off a gut churning 77% from its 2010 high.

I don’t think I’ll be singing “Waltzing Matilda” in the shower anytime soon. That’s the national anthem of Australia, the world’s largest producer of the orange rocks.

If my answer puzzles them, I then direct them to the recent statement by the Saudi Oil Minister, Ali al-Naimi. He says his kingdom will continue its present record levels of oil production, even if the price plummets to $20 a barrel.

If they then appear perplexed, I point out to them that US ethanol production just surpassed a once unimaginable 1 million barrels a day, a new all time high. Corn prices have fallen so far that it is cheaper to burn food than to eat it.

At this point, the expression on my friends’ faces is now one on complete befuddlement. They start checking their watch, their iPhone for any new text messages, look for new tweets, or updates to their Facebook account.

Then I move in for the kill.

I point out that the Baltic Freight Index ($BDX) has just hit an eight year low. This is the widely followed index for the cost of moving bulk raw materials, like coal, grain, and iron ore.

Now my friends are utterly clueless. Wasn’t this supposed to be a conversation about homes, loans, and interest rates.

If they still don’t get it, I then spell it out more clearly, with the appropriate soaring logic and literary flourishes.