Commodity prices are bonkers

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Wall Street’s commodities bubble is going swimmingly. The latest bucket shop to push the new ‘supercycle’ is Morgan Stanley:

Commodities outperformed equities in 2021, but only for the second time in a decade. It didn’t used to be like this: in half the years between 1970 and 2010, commodities beat equities. Given several tailwinds, we think this can start to happen more often again.

Rally to continue: The Bloomberg Commodities Index rallied 27% in 2021, compared to the MSCI World, which returned ‘only’22%. This was only the second year since 2010 that commodities outperformed equities. Several tailwinds,however, boost commodities’ prospects for coming years:

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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.