|
THEMES // SUPPLY INELASTICITY // THE LIST GOES ON, THE BALTIC DRY INDEX |
|
The list goes on
|
- Gold: the age-old store of wealth,
demand for gold continues to accelerate as newly-prosperous nations look for safe havens
for their wealth. In addition, much of the global supply has been 'high-graded'
(the best material is mined, and the rest left for later.)
- Foodstuffs: while seemingly replenishable, the growing of wheat,
corn, rice, etc. take their toll on the land used to grow them, and the diminishing returns will
fall short of burgeoning demand. In addition, the very fact that the global population is growing
means that there is an ever-increasing competing use for the land itself (to house people, build factories, etc.)
- Base Metals: the fundamental building blocks of industrialization are,
like oil, a finite resource, and the demands of the expanding industrialization are leading to explosions
in the prices of iron ore, copper, zinc, nickel.
|
|
The Baltic Dry Index – the pulse of global demand
|
- The Baltic Dry Index (BDI) is an assessment of the cost of moving the major raw materials by sea.
- Since the cost of shipping varies with the amount of cargo that is being shipped (supply and demand),
and since dry bulk is usually goods that are precursors to production (like cement, coal and iron ore),
the index is also seen as a good economic indicator of future economic growth and production.
|
|
|
