Insana: Commodity Prices Signal Possible Global Recession

The recent drop in commodity prices has ominous implications for the economy, says CNBC contributor Ron Insana.

The S&P GSCI commodity index has dropped 3 percent this month, as sluggish global economic growth curbs demand.

"I expect to see more declines in the future," Insana writes on CNBC.com.

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"So, what are commodities telling us, not only about inflation, but about global growth? Outside of the U.K. and U.S., the message of the markets seems quite clear: the world is again on the cusp of declining growth and, possibly, recession."

Japan's economy shrank at an annual pace of 6.8 percent in the second quarter, while the eurozone registered zero growth, Insana notes. And China may not reach its 2014 growth target of 7.5 percent, he says. Other emerging-market economies are hurting too.

"One could also argue that monetary, and fiscal, policies in Europe, Japan, Russia and China are not sufficiently loose to shore up these struggling economies," Insana writes. "Commodity markets are making that quite plain."

Sara Johnson, senior research director of global economics at IHS, also has turned more pessimistic about economies worldwide.

"The message is clear: the global economy will see very little acceleration this year," she told the Los Angeles Times. Johnson recently cut her forecast for global growth this year to 2.8 percent from 3 percent.

But she doesn't expect a global recession, which she defines as growth of under 2 percent.

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