...............Changing gears a bit, we have more evidence that the global economy could be slowing…

Regular readers know commodities have been crushed over the past few years. Those with industrial uses – like copper, aluminum, zinc, iron, and steel – have been hit especially hard, as consumption in China and other emerging markets has collapsed.

Today, we learned the situation is unlikely to improve anytime soon…

Research firm Macquarie noted this week that supplies of steel – one of the most widely used of these metals – still dwarf demand.

It's so bad, the firm says 250 million tons of steel production capacity will have to be taken off the market just for steelmakers to make a profit again. To put this in perspective, all of Western Europe produces just 170 million tons a year.

In other words, despite the devastation in steel already, you could shut down all the steel producers in Europe and prices still wouldn't be high enough for the remaining producers to make a profit.

Unless we see a dramatic rebound in the economies of China and other emerging markets, expect the prices for steel (and other industrial metals) to stay low for some time.

Unfortunately, the latest data suggest things are getting worse, not better, for the global economy.