There are any number of ways to measure “commodity prices”; similar to stock indices, there are many ways to construct a continuous time series that gives a broad idea of what the total price of commodities are doing.  But regardless of the specific mechanics of construction, one thing is true: prices are collapsing.  Below we chart the CRB Commodity Index, the S&P/GSCI Index, and the Bloomberg Commodity Index.  We also show total returns for the Bloomberg Commodity Index since 1991, as well as the total returns for each component part.  Using the Bloomberg Commodity Index’s methodology for composition and total returns (which take into account the roll yield of futures curves) commodity investors are unbelievably flat over the last twelve years!  Furthermore, investors have lost 90% (-27% per year) in Energy since the local peak in that index in July of 2008.

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