Commodities have had a rough go of it lately, with gold prices dropping to a four-year low last month and oil prices recently plummeting to a five-year low.
The Bloomberg Commodity Index has slid 10.9 percent so far this year.
"This is not good news for the global economy," says CNBC commentator Ron Insana. "The message of the commodity markets, in many ways, is hardly a reassuring one when it comes to the outlook for global economic growth," he writes on CNBC.com.
The commodity slump has particularly ominous implications for overseas economies, Insana says.
"Japan's recession is deeper than previously thought. China's demand for basic materials, amid a glut of uneconomic construction projects, appears to be plummeting," he writes.
The eurozone continues to hover near a recession, and emerging market economies are struggling too, Insana notes.
The United States hasn't suffered, as we are major commodity consumers, but our energy sector could be damaged by lower oil prices, Insana writes. Moreover, a collapse in global growth could drag us down too, he says.
But CNBC Senior Contributor Larry Kudlow isn't too worried about the impact of falling oil prices on the U.S. economy.
"This is a gigantic tax cut for the American economy," he told Newsmax TV.
"It's not a marginal tax rate reduction, I'm just saying it has the same impact. People will have much more disposable income to spend on other goods and services, and the middle class needs that because they've not had big wage gains."
The oil price drop will be a boon for corporate America too, Kudlow said.
"Businesses need this," he argued. "Manufacturing companies and retailers and everybody else, they all have fuel costs, they all have heating costs. And all of those numbers are coming down, so it really lightens the economy. It is very pro-growth."
Related Articles:
© 2025 Newsmax Finance. All rights reserved.