The FT’s Lex Column last week:
Like leaf blowers, commodity analysts seem pointless and full of hot air. Investors might have at least expected some respite when the resources bubble burst last May. In spite of buy recommendations across the board (if everyone in China bought a refrigerator, etc), the price of oil, copper and cotton halved. But it has taken less than a year for noise surrounding commodities to reach full volume again.
What is more, the worst economic slump in generations has done nothing to modify the bullish arguments of old. Commodity prices, apparently, will rise for ever on the back of rapid growth in emerging markets. The current rally may well have legs. But, just like last time, the fundamentals do not stack up.
Oh?
Assume, for illustration, that the long-term supply of resources is more or less the same as before the crisis. That seems sensible…
Ah.
