Question:

1
666 - 2009

• Question
• Do we see evidence of developing commodity
  scarcity in economic time series?
• I look to some marker series.
• http//minerals.usgs.gov/

2
The time series

• Global production-consumption and (real) price
  during the past 108 years 1900-2008
• Copper
• Lead
• Zinc
• Nickel
• Gold
• Crude (from 1960)

3
Copper
Copper production and consumption has increased
by 31x since 1900 price has decreased by 20
even in face of the 2006-08 pseudo-boom!

4
Lead
Consumption has flattened since Pb was removed
from gasoline the 2006-08 price boom might be
reflected in higher production?
5
Zinc
What accounts for the general drop in price of
these metals? Plenty? Efficiency? Cheap
energy? Higher grade ores? Recycling?
6
Nickel
I see no clear price/consumption relationship.
It doesn't appear that increased consumption is
driving price or price is driving production.
7
Cause-effect relationship?

• None of these metal commodities has increased in
  value relative to the rest of the global economy
  during the entire 20th Century. Does that mean
  that they have remained in abundance?
• These economic series would not suggest that we
  are imminently running out.

8
Politically tainted commodities

• I would argue that crude oil production is
  severely managed by non-economic forces and
  mediated by political events. Still we believe
  that we are facing Peak Oil and might have
  already passed the peak. If so, we face energy
  penury.
• I suggest that gold is also not involved in the
  economy as a simple supply-demand commodity.

9
Crude oil
The oil shock of 1973 drove crude prices to
levels that have not been seen since. High
prices in the '70s stimulated conservation,
lowering prices that led to production collapse
in the '90s... and again the cycle?
10
Gold(Is gold a commodity?)
I think gold is a psychological measure of
uncertainty rather than a real commodity. It
isn't much used it is largely saved in bullion
and coins. Only a fraction is used in jewelry
and industry.