| While Alan Greenspan, the former chairman of the US Reserve, and the bond market see at least a 1-in-3 chance of a US recession this year, commodity markets are showing no risk of that happening anytime soon.
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| Nickel and tin have jumped more than 18 per cent this year, cattle hides are up 3.3 per cent and burlap rallied to a record.
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| The raw materials are part of the Journal of Commerce Industrial Commodity Price Index, a measure created by Greenspan’s mentor and former professor, Geoffrey Moore. The former Federal Reserve chairman uses it as a benchmark for the economy and inflation.
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| Commodity prices “are certainly sending a message that the economies are relatively healthy,’’ said Anatol Feygin, head of global commodity strategy at Bank of America in New York. “Specifically to industrial metals, it’s clearly telling us the market is still very tight.’’
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| Demand from China, the US and India for steel, copper, oil and polyester drove the index 72 per cent higher over the past five years to a record 135.9 this month. China’s government is targeting growth of 8 per cent in 2007, after expansion of 10.7 per cent last year, the fastest pace since 1995.
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| Greenspan said in an interview on March 5 that there’s a “one-third probability’’ of a US recession this year. The Dow Jones Industrial Average that day reached its lowest since November. It has since rebounded 1.9 per cent to 12,276.32. |
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