The coming commodity-price collapse

The indirect consequence of the oil-price rise and the dollar-value drop is the largest increase in commodity prices since 1973. Commodities finished their best first-half year in 35 years. And what is unique about 1973?

On October 17, 1973, Arab nations, including the Opec members, suspended all shipments of oil to countries perceived as supporters of Israel during the ongoing Yom Kippur War. The United States, as well as Western European nations and Japan, saw their fuel supply cut. Further, wellhead prices were raised in concert with the oil embargo.

Gold doubled in price from January 1973 to 1974. The price of soybeans, wheat and corn also rose by at least 100 percent, closely tracking the price of crude oil. The US dollar lost more than 15 percent of its value and the New York stock exchange fell 25 percent during that period.

ABS-CBN