From Bloomberg:

Nov. 3 (Bloomberg) -- Commodities prices probably have further to drop before resuming a multiyear rally fueled by reduced global supplies and growth in emerging economies, said fund managers including John Brynjolfsson at Armored Wolf LLC.

Rising indebtedness in the U.S. is slowing the economy and the rapid pace of growth in China and India has slowed, signaling the Reuters/Jefferies CRB Index of 19 commodities will continue to decline after plunging 22 percent last month, Brynjolfsson said today at a conference in New York.

``We're seeing a sharp slowdown in the emerging countries,'' including China, said Brynjolfsson, who is the managing director and chief investment officer at Armored Wolf, a hedge fund in Aliso Viejo, California. ``There will be a collapse'' in commodity prices, followed by a ``long-term supercycle'' spurred by ``a depleting global base of supply and a huge, growing population,'' he said.

Crude oil, copper and wheat tumbled more than 50 percent from records this year as a seizure in the credit markets caused economies around the world to slow. U.S. gross domestic product declined in the third quarter by the most since 2001 and failed loans have generated $686 billion in writedowns and credit losses globally.

Rising consumer debt in the U.S. will lead to a decline in the dollar, sliding demand and a lower standard of living for most Americans, said Peter Schiff, who oversees $1 billion as president of Darien, Connecticut-based Euro Pacific Capital.

Long-Term Rebound

Like Brynjolfsson, Schiff said the slump will be followed by growth in emerging economies, which will boost domestic demand for goods.

``The real lift in commodities will come from millions of consumers around the world,'' Schiff said. ``This will lay a foundation for a rally in commodities.''

In October, the dollar rose 7.8 percent against a basket of six major currencies, the fourth straight monthly gain and the biggest increase in 16 years. Last month's drop in the CRB index, which reached a record high on July 3, was the fourth and the most in at least five decades.

U.S. consumer spending tumbled in September and a purchasing managers' survey showed the biggest deterioration since 1968, foreshadowing a deepening economic slide. Last week, the Commerce Department reported that the economy contracted at 0.3 percent in the third quarter, the largest decline since 2001.

Schiff recommended investors buy precious metals and agricultural commodities. Brynjolfsson also suggested precious metals for investors, and said they should avoid industrial metals and energy products.