Tuesday Sept 23 2014
Iron ore futures continue to fall in price. It appears to me that this is par of a world wide deflationary trend. Check out
http://www.themarketperspective
for more on the falling CRB indes, oil, gold, and silver prices. As I keep saying in class, accounting is much more than debits and credits today. A professional accountant must have a global outlook. While we hear that a lot, what it means is understanding prices and trends around the world in various markets.
Recall that the FED lowered interest rates in an attempt to get people to borrow and buy. But now prices are falling again. How do you force someone to buy?
Commodities Resesarch Bureau Index - Investors Beware of Falling Prices
Why is this a problem? If money is borrowed against a commodity and the commodityprice falls, there is less collateral to secure the loan. But the loan balance is still on the books. Notice that the stock market is also starting to wobble up here. Small cap sock performance is trailing big caps.
I suspect all of this is the beginning of the end of the stock market rally.
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