Falling Commodity Prices Spell Trouble

The wheels are finally coming off the decade-long commodity boom. Watch out, Australia in particular. But beware Indonesia and to a lesser degree Malaysia. The price decline has probably only just begun. Take gold, often seen as a harbinger of commodity price trends generally. Those who think it is cheap after a 20 percent fall from its high should remember that it is still four times its price just 10 years ago. Iron ore is still five times and thermal coal three times 2003 levels.

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