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Commodity and US Dollar Back To 1749

Commodity and US Dollar Back To 1749

Chart Du Jour
By Tim Iacono

It ‘s not clear how graphics like the one below (spotted at The Big Picture) are created since there probably wasn’t a Bloomberg-like organization to collect data for the price of sugar back in the 1700s, but, if the data is anywhere near accurate, it tells a fascinating story – not about commodities, but about the U.S. dollar.

Long Term CRB

The red annotations are mine, the point being that, prior to Nixon severing the last ties between the U.S. dollar and gold, the only time there would be spikes up in commodity prices was during wartime. Then, after the wars concluded, prices would revert back to their previous levels (i.e., prior to WWII) – about what you’d expect to happen with a commodity based currency...
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