Mirtchev, A. (2008, September 24). Global Economic Security Rebalancing – Commodities Price Volatility as a Symptom of Upcoming Asymmetric Economic Cycles. iStock Analyst.
Dr. Alexander Mirtchev says that commodity price fluctuations are a fact of life and should be taken into account by both developed and rapidly developing economies when making plans to tackle the credit crunch and the concomitant global economic security challenges. He indicated that those that relied on commodities and natural resources to act as a buffer to the vagaries of the credit crunch are now painfully aware that this is not the case. The commodities markets, just like any other, would be intrinsically linked to market sentiments that are in turn guided by how policies and regulatory frameworks are factored in market players’ calculations. Likewise, commodity price fluctuations are gradually becoming less and less correlated with economic growth. The long-term stability prospects of energy-heavy economies such as Russia, Brazil, Bolivia and Mexico are unlikely to change, however. The strategies for recovery leading to an extensive rise in government debt by the U.S. and other developed economies will affect the value of the dollar and further encourage investments in productive assets, including oil.