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One more commodity chart




This index of commodity prices contains a decent amount of crude oil and products, in addition to a variety of other industrial commodities. Since crude prices are still about one-third less than their mid-2008 highs, it is remarkable that this index is now at a new all-time high. That is a testament to the pervasiveness with which commodity prices have risen across the board.

Note that 100 on the chart marks the mid-Nov. '01 low for most commodities. And recall that over the course of 2001, the Fed dropped its funds rate target from 6% to 1.75%—a substantial easing move that was exceeded in magnitude only in 1982 and 2008. Easy money—which has been with us for most of the past 9 years—provided the spark which subsequently drove commodity prices to a 200% gain.

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