One of the concerns of late is the weakness in commodities and what that portends in terms of global growth going forward. Many argue that the slide in commodity prices is discounting a collapse in global growth in the near future.
At a time when the Federal Reserve Bank has been debating how to end QE, recent developments in the economy have shown a deceleration in activity that has also transmitted into lower commodity prices. Stocks have been extended for some time, but have recently pulled back to support; while internally, many sectors have already exhibited sizeable corrections since February and March.
With the financial experts claiming, some gleefully, that gold has "lost its safe haven status" in the aftermath of its biggest tumble in 30 years, many commentators thought (hoped?) that the dramatic price drop would steer people away from gold ownership.
As highlighted in a previous article, while the economy is on solid footing with little chance of a recession on the near horizon, there were some warning signs that we could be due for a soft patch in Q2.
Financial history is marked with times when populations took collective leave of their senses and succumbed to delusions of ever-expanding wealth. Times of rampant speculation have been enthralled by the introduction of new technologies, that are used to justify pumping-up market valuations, - not just for the present, but also for the near future, and far over the horizon as well.