Råvarumarknaden signalerar helt klart en sämre ekonomisk utveckling och deflationen kommer att bli ett större problem än man tidigare anat.
Staying with the "market versus the economy" theme, the continuing decline in commodity prices is certainly worth noting. As shown in the chart below, the general trend of commodity prices has a fairly close relationship to overall economic growth.
This relationship is not surprising given that when an economy is growing, the demand for commodities to consume, manufacture or produce goods and services rises which cause prices to rise. However, the current decline in commodity prices suggests that the globally weak economic environment is a rising deflationary force.