The CRB Spot index, one of the many commodity price indexes, rose above the key 400 threshold
yesterday, again illustrating the excess liquidity around the globe. The CRB Spot index is up 24% since a year ago, with The Economist's commodity price index showing similar increase. The third important commodity price index, the CRB Futures index is a lot weaker, however, mainly because it includes energy prices which have fallen during the latest year. Even that is however up more than 4%, a lot higher than the official consumer price indexes.
This excess liquidity is also evident in the stock market rally. The S & P 500 for example is up more than 15% during the latest year, far higher than the increase in profits of 7%. This, and the fact that the market looks overbought on technical grounds, means that the probability of a significant correction is high.