Wild Chinese inflation all commodities bubble

Chinese inflation out today. CPI barely worth mentioning. The PPI is where the action is:

In May , international crude oil, iron ore, non-ferrous metals and other bulk commodities prices rose sharply, domestic demand recovered steadily, and China’s industrial product prices continued to rise.

Here’s the detail:

It’s all steel and oil. Undoubtedly, China put a bid under steel. Oil is just OPEC manipulation.

Given the inflation is almost entirely driven by base effects on commodities and is not at all broad-based, markets buying of commodities to protect against commodity inflation shapes as the real culprit.

As China slows, this reflexive market bubble is going to go burst.

Houses and Holes
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