The dramatic weakness in commodities and mining companies over the past week extends the secular decline we have noted since 2008. But on a shorter-term window, since 2011, price weakness in these sectors has been signaling the onset of a fresh cyclical downturn in the global economy. From the 2009 bottom to 2011, there was some intermittent hope that QE programs from Central Banks could blunt or suspend the resumption of a demand-led recession in the world. Those hopes have been steadily crushed by the weight of disappointing economic data year to date. Copper has been leading the revelation.
The words of the Tragically Hip come to mind:
“Its been a long time running.
Its been long time coming.
Its been a long time running.
Its well worth the wait.”