Commodity prices
In the U.S., Australia and elsewhere, motorists are relishing cheaper petrol, which gives them more money to spend on other items. Commodity and oil importers such as the Eurozone, China, Japan and India are enjoying healthier trade balances from the drop in prices.
But the collapse in the price of coal, copper, oil, iron ore and other commodities due mainly to China's slowing has repercussions that need to be monitored (as does China's slowdown too). For starters, the plunge in commodities entrench deflationary forces in the Eurozone and Japan, which could see their policymakers turn to more radical steps to revive their economies.
Other concerns are that oil-producing and commodity-exporting countries are facing a hit to trade balances, government budgets and consumer spending.
Countries such as Brazil, Chile, Colombia, Russia and Venezuela are being buffeted by the plunge in commodities at a time when the prospect of higher U.S. interest rates is hoovering capital from these countries, undermining their currencies and boosting repayments on the $4.5 trillion of US-dollar-denominated debt that emerging countries owe.
A development to look for is the political instability that usually pairs with economic hardship. Even Saudi Arabia's stability could be tested--many experts have long seen it only a matter of time anyway before the Al Saud dynasty's grip on power weakens, opinions that have gained more notice in recent weeks.
Advanced countries that rely on commodities are not immune either. In the U.S., some high-yield funds that invested in shale-linked bonds have stopped returning cash to investors after being swamped by demands by clients for their money, raising concerns about a 2008-style upheaval on credit markets.
Australia's fate is more straightforward. The Reserve Bank's commodity price index has more than halved from its peak in mid-2011.
That battering to Australian living standards is felt via reduced mining earnings, lower wages, a falling currency and restricted government services (or higher debt and increased pressure on interest rates if authorities fail to adjust their spending to match the decline in tax receipts, which means lower-than-otherwise future living standards).
