For those who may be wondering, “Davidson” was calling for commodity prices to begin to fall as far back as 2012. I’ve linked to a couple posts where he speaks to the “Financialization of Commodities” in 2012 here and here . The average investor a decade ago had no real way to bet on the price of commodities. Now, with a glut of ETF and index funds that track their prices and then enter the futures markets, every investor of any ability is able to wager on the prices of the commodities. For proof, my 11 year old, who has a brokerage account I let him trade at will, was talking yesterday that “it might be time to buy some oil, Dad”.   This has caused commodity prices, once more reflective of the supply/demand situation, to now become detached from that.

If anything, the large drop in oil and copper ($HG_F) should be looked at as hugely bullish. The drop in oil (USO)  has led to gas prices falling ~$.50 YOY, that means ~$50B more in consumers’ pockets.

“Davidson” submits: