01.12.2011 - Questions for the commodities (and materials and industrials) bulls
Commodity traders are cheering China’s rate cut today by buying up Nymex crude futures. That may be the wrong reaction. Nymex crude is up more than 1% to more than $100 a barrel, rallying along with energy and materials stocks (and industrials and everything else). After all, if China is now priming the liquidity pump along with every other central bank in the world, then why wouldn’t commodity prices rise? It’s worth recalling, however, that central banks were priming the liquidity pump in 2008, too, but falling demand led to falling commodity prices. That may be a cautionary tale today...............................................Full Article: Source
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