| During the previous decade, there was lots of buzz about the commodity super-cycle. In my opinion, super-cycles should last at least 20 years. If so, then the latest one in commodities wasn’t so super. I reckon it lasted about 10 years, kicked off by China’s joining the World Trade Organization in December 2001 and starting to peter out when China’s industrial production growth peaked at a record 20.7% on a y/y basis during February 2010.
It was down to 6.9% last month. The proponents of the super-cycle assumed that rapidly growing demand for commodities in China would outstrip supplies for a very long time, pushing prices higher. They did rise for a while. But as they say in the commodity pits, the best cure for high commodity prices is high commodity prices...............................................Full Article: Source
|