by Sam Alston
You can probably be excused for failing to notice that commodity prices on the whole have been falling. The price of gold (19.5% fall over the year), wheat (20% fall), and oil (over 30% fall) on global markets have all dropped recently. This has left mainstream finance reporters rather excited. As with house prices rises, commodity price falls are apparently a fundamentally good thing. However it’s worth considering what this commodity price movement actually means.
Lower commodity prices means lower production costs for net importers of commodities (much of the western world), thus supposedly lower prices. The continual rise in the price of things like energy and bread that we have seen in the past few years should abate. Since it has been made clear over the last few years that society no longer guarantees the right to commodities needed to live (like food), a reduction in these prices would potentially be the best step to stop people starving.
Those of a more revolutionary bent, may be slightly disappointed. A high cost of living has helped to bring down dictatorial governments in places like Tunisia, helped prompt the occupy movement, and just last week promoted an uprising in Burkina Faso that saw the parliament burnt to the ground.