Friday’s jobs miss adds fuel to the phenomenon we wrote about two months ago. Back in July (“A Structural Inflation Shock“) we quoted veteran commodity hedge fund manager Doug King assessment of the commodity markets, via Bloomberg’s interview with him then:
Commodities are back, and from pension funds to physical commodity traders, everyone is making money. The question now is whether it’s a temporary snapback from the pandemic or signals a longer-term shift in the structure of the global economy. King is in no doubt.
“We are facing a structural inflation shock,” King said. “There’s a lot of pent up demand, and everyone wants everything now, right now.”
For the first time since the pre-crisis years before 2008, the commodities boom means central banks are fretting about inflation.
After speculating about whether this may be the start of a new commodity supercycle, Bloomberg’s Javier Blas gave Doug King the last word: “This is the beginning of a proper boom cycle — this isn’t a transitory spike.” Read More