Nirgunan Tiruchelvam Head of Consumers Equity Research
August 19 2019
What the inverted yield curve means for commodity prices
In 595 BC, King Croesus of Lydia asked the Delphic Oracle whether he should go to war with Persia. Both Lydia and Persia were powerful kingdoms. The Oracle told Croesus that if he went to war with Persia, a great kingdom would collapse.
Croesus took this to mean that he would prevail against Persia. In fact, Persia decimated Lydia. Sadly, Croesus had tragically misinterpreted the Oracle and ignored that it was his Kingdom that would be the victim.
Today’s equivalent of the Delphic Oracle is the yield curve. The inversion of the yield curve is viewed as a prelude of recessions...
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