The Commodities Bubble

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By Jesse Colombo              

In our age of incessant financial bubbles, it was only a matter of time before commodities experienced a bubble of their very own. Initially rising due the rapid development of China and other emerging markets, the price of nearly every commodity from wheat to uranium exploded during the past decade as hundreds of billions of dollars of capital entered commodities as the new “hot” investment destination. Terrorism, war in the Middle East, near-zero interest rates, quantitative easing and growing distrust of conventional investments have only served to bolster commodities’ newfound role as an investment. Now in its tenth year, the fate of the commodities boom (and now bubble) is inextricably tied to China’s teetering economic bubble, Western economies on the verge of another financial crisis and the vagaries of speculative capital flows.

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