Home >> Stock Forums >> How the credit crunch affects the commodities market

How the credit crunch affects the commodities market

AlfredSokol said: "The credit crunch bugaboo is getting to everyone. Here's how one company thinks it [url=http://www.moneyweek.com/file/33251/what-does-the-credit-crunch-mean-for-commodities.html]affect the credit market[/url] [quote] In the short-term, the disruption caused by the credit crunch might impact negatively upon commodity prices and resource stocks because stressed investors may be forced to sell whatever they can to finance client redemptions and margin calls. A margin call is when a provider of credit requires additional cover to maintain the line of credit already in place, a very destructive but inevitable part of the credit crunch process.[/quote] Margin calls will have a negative effect as margin loans are called."

ratAphooey said: "interesting point about China gobbling up as many resources as possible. That has to affect commodities too."