Amidst the gloom surrounding the Great Recession, one of the less discussed stories surrounds the boom in commodity prices in the aftermath of the sub-prime mortgage meltdown. There is a very strong view that the latest spurt in this "commodity super cycle", which has been on the ascendancy for more than a decade now, was triggered off and is being sustained by the ultra-accommodative monetary policy regime followed by the Federal Reserve in the US.
The excellent graphic from Quartz puts the commodity super-cycle theory in perspective. Ruchir Sharma had a very persuasive article in the FT recently. And he argues that the biggest threat to deflating this bubble will come from China's weakening growth prospects.
The excellent graphic from Quartz puts the commodity super-cycle theory in perspective. Ruchir Sharma had a very persuasive article in the FT recently. And he argues that the biggest threat to deflating this bubble will come from China's weakening growth prospects.
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