Speculation that the Chinese government is going to introduce a stimulus package following the Olympics lead to a 7% one-day gain in the Shanghai market today. Commodity prices also staged a sharp rebound with oil up over $2 a barrel. What is clear is that even if the Chinese growth slows dramatically, their country's insatiable demand for commodities will nto disappear. Those who believe that we are on the verge of a correction in commodity prices (or a bubble burst in commodity prices) that will prove some relief to inflationary pressures will be disappointed, I am afraid.

 

Submitted: Aug 20, 2008    Views: 81    Comments: 0    Likes: 1   


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