yellowcake hunters chase a mirage, page-6

http://www.theaustralian.news.com.au/business/story/0,28124,26132157-18261,00.html

Commodity prices to fall

WARWICK Grigor at BGF Equities is expecting any interest rates rises in the US or elsewhere to start money leaving commodities, a view backed by the recent dive in the Baltic Dry Index, which measures prices and demand for bulk shipping. He can see commodity prices falling as much as 20 per cent.

But during the week we read something even more worrying: broad money supply in the US is falling, US consumer credit fell by an annualised 10 per cent to July, and the American banks are still reducing their lending despite the efforts of the US Federal Reserve to get the economy moving.

Now, it seems, Spain is moving from recession to depression, with unemployment reaching 1930s levels and the benefit has been cut. And a German research body says car sales in its country by 2010 face the greatest ever decline.

Yet, here at home, investors seem to think they are bullet-proof when it comes to speculating in the mining sector. If we do see another commodities price shock, woe betide those left holding scrip when the music stops.