Watch American Prices
The days when a fall of prices in the United States was a cause for alarm and despondency have long been over. The main reaction to last week's widespread break in the markets for grains, cotton, cocoa, soya beans, fats, oils, hides and hogs was a heartfelt hope that the prices which had come down would stay down and that a few more would follow them. The only serious dissenters from that hope will be those who had speculated for a further rise, and little sympathy will be wasted on them. Even in Moscow there is joy at the news—though probably for the wrong reason, since in Russian eyes any break in American prices is mainly significant as the possible beginning of a good old-fashioned slump. The rest of the world neither hopes for nor expects anything of the kind. In fact it tends to suspect that the fall is too good to be true. The search for the causes of the break has revealed none which can be regarded as either fundamental or likely to persist. The post-war re-stocking phase in the United States may be over ; favourable early crop forecasts may have led some dealers to expect a price decline as the 1948 harvests come in ; some American producers may be anticipating the rejection of the Marshall Plan and a consequent wiping out of the biggest single block of potential orders for American goods ; others may fear that the devaluation of the franc is only the first of a series which will tend to stimulate the exports and curtail the imports of European countries ; still others may have decided, rather against the evidence of home demand, that recent high American prices were a bubble which has now been pricked. All this may be so. But even the most hopeful observer could not swear that it is so.
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