From the AFR comes Australian Atul Lele, the Bahamas-based chief investment officer of private wealth manager Deltec:
“Right now, commodity prices are consistent with 8 per cent global industrial production. If we saw that, ex of the financial crisis recovery, it would be the strongest rate of global industrial production growth since 1981, at least. Now I’m bullish global growth and more bullish than most people, but it’s not going to happen and even if it does happen, all you’ve done is justify current commodity prices. So why would you buy a resource stock now?”
Commodities prices are also inferring that the US dollar declines by 15 per cent year on year, but the higher dollar is negative for commodities because emerging markets have rely on cheap US dollar funding for growth. The US Federal Reserve have “already tightened twice and they’ve told us they’re going to tighten more aggressively than we previously thought,” Mr Lele said, on a visit to Sydney last week.
