Is the global economy in trouble?

 

Many surveys suggest Europe is gaining some strength and the rest of the world is also showing signs of life.

I have a problem with this assessment. The reason is due to the trends shown in the above graphs.

These trends are saying output of important raw materials (including lumber) are tumbling.

My point is - how can the world economy be strengthening when commodities are still weakening?

It is a proven fact of the business cycle that commodities rise only when the economy improves. And right now global commodities are still tumbling.

But there is another consideration to be made. How can profits improve if the global economy is growing so slowly that commodities are declining?

 

More details in The Peter Dag Portfolio on www.peterdag.com

George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets
No. 1 bond timer in the past 12 months. 

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