Ron Insana On Seriousness Of A Global Deflation

CNBC contributor and Marketfy Maven Ron Insana was recently seen discussing the seriousness of a global deflation and the impact of falling commodity prices.

Markets: Undervaluing Risk Of A Global Deflation Or Taking It Seriously?

When considering the markets stance toward a potential global deflation, Insana responded,“I think more the latter [taking the risk more seriously] than the former.”

“Actually, in a certain sense both, right? I mean, they have been looking past what were yellow flags last year and are now becoming red flags around the world outside the United States,” Insana said.

“U.S. and I think the retail sales data is a little dodgy [Wednesday] morning, but when you look at rates around the world, a Swiss 10-year yield is less than 20 basis points, the German bonds at a half, the Japanese government bond at a quarter percent.”

“These collapses that we are seeing in interest rates. The drop in copper last night was stunning, that’s 13 cents.”

Related Link: Ron Insana Vs. Peter Schiff: Already The Debate Of The Year

Talking Specifics: Falling Commodity Prices

He continued, “Copper’s peak was $4.75. We are down to $2.50 a pound now, that tells you something about Chinese growth. There was a lot of stock piling a couple of years ago, there were some big firms that were warehousing copper to drive the price up, we used to call that a corner, but when you look at commodities, oil being one of them and chief among them, they have collapsed on an average about 40 percent.”

“This is a big deal and it does say a lot about global demand. Again, I think the U.S. is in a better shape as a consumer of commodities; we do get some benefits from those price drops, but this is a dangerous sign overseas.”