SDCI - Financing Challenges Are Another Reason Why Commodity Prices Should Head Higher
Extracting ores, metals, energy from the crust of the earth, or producing agricultural commodities is a capital-intensive business. For many years, the world’s leading producers turned to financial institutions for the funds to support production projects. Commodity finance had created a win-win scenario for banks and producers.
Over the past months, the tidal wave of liquidity from central banks, historically low interest rates, government stimulus, and a falling US dollar have created an almost perfect bullish environment for commodity prices. The US Fed recently told markets the central bank is willing to tolerate inflation levels