Remarkable parallels are suddenly afoot. Australia has now entered its third great bulk commodity boom in a decade:
The first boom was a supply side shortage as Chinese demand exploded driving prices wild. The second boom was an investment and volumes explosion that destroyed prices. The third boom is a bizarre mix of desperate Chinese politics and supply side accidents. In short, a short term volumes implosion driving prices crazy again.
That mix means that one key feature of the first two booms is missing. There is no investment, no jobs and no wages growth, the single greatest gift of the first two booms. That means that this boom is limited to stock prices and Budget repair.
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