Why iron ore might crash

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China’s growth numbers were out yesterday afternoon and were very interesting indeed for the commodity analyst. The headline numbers looked out of this world on base effects, even year-to-date numbers. Fixed asset investment was up 35%. Industrial production up 35.1% and retail sales up 33.8%:

Base effect boom

Base effect boom

However, these numbers are going to tumble all year as the base effects wash out. Rather than go through each one in terms of actual aggregate numbers, let me show you the most important for bulk commodities which is real estate.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.