Just as the business world is dependent upon commercial paper as its life blood, the world of global trade depends on letters of credit (LOC). Without LOCs, the world of trade quickly freezes up. As result of Letter of Credit Frozen is shipping for coal, iron ore and other commodities will fall because banks are guaranteeing fewer loads. Accordingly, prices for most commodities will be elevated. Moreover, there is a very real risk that various economies will start to face stresses in this time of "Just In Time Delivery" as very small stock piles vital commodities quickly get vacuumed up by normal industrial demand.
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$158.77 (10/16/08)
