Everywhere you look there’s still more evidence that the world economy is grappling with a global deflationary supply glut.
To be sure, this wasn’t supposed to happen.
Trillions in central bank cash and seven years of ZIRP across
DMs was supposed to give a defibrillator shock to global demand and
trade. Instead, the wealth effect never trickled down
(surprise!) and wide open capital markets only served to keep insolvent
producers in business, contributing to still more supply as everyone
hangs on until the bitter end. As China’s slowdown continues unabated,
the commodity hoarding becomes more evident and indeed on Thursday, The
International Grains Council reported that global grain stocks are
forecast to hit 447 million metric tons, the highest level in 29 years. (more)
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