Metal prices fall further than during Great Depression

Source: Telegraph.co.uk

Kevin Norrish, the bank's commodities strategist, said the average fall in the price of copper, lead, and zinc has been roughly 60pc since the peak in July this year. All three metals were traded on the London Metal Exchange in the inter-war years so it is possible to make a comparison.

Prices for the three metals fell 40pc from their highs in 1929 before touching bottom in 1933, with the bulk of the fall in 1930 as the slump spread worldwide. "Lead and zinc have already lost more than they did in the 1930s," he said.

Copper was hit hardest during the Depression, despite the electrification drive in the US and the Soviet Union, falling 70pc at one stage before creeping back in the mid-1930s. The reason was an 85pc fall in US construction, then the biggest user of the metal.

Barclays Capital said the broader equity markets are already discounting the sorts of "savage declines" in corporate profits that were last seen in the Slump. It said (trailing) price to earnings ratios are actually lower now than they were the early 1930s, with moves in credit spreads that suggest investors are anticipating depression-era levels of economic contraction.



Read more: http://www.telegraph.co.uk/finance/newsbysector/industry/mining/3543370/Metal-prices-fall-further-than-during-Great-Depression.html

google:
Money Masters

About how deflationary a lot of the commodity price declines are, etc., etc.

Mostly they ignore that speculation had produced a commodities bubble, and take the high price levels resulting from a speculative bubble to be equivalent to the high price levels that resulted (in the past) from actual delivery-based demand.

In other words, it's unclear that they're making a valid comparison, even though it makes for a great story.

Depression, will be said loudly by the MSM in the first Obama term.