We have had a long stretch of historically low interest rates, and central banks have flooded the market with liquidity. This is the perfect recipe for massive inflation. Inflation is already running hot.
But there is more than just monetary policy that will make commodity prices heading higher. In addition to central bank’s monetary policy, the drivers of the market will be:
1. Massive underinvestment in new supply across virtually every commodity
2. Hundreds of billions of dollars of upcoming government spending on commodity-intensive infrastructure needed to build out the global economy
Inflation… here we come!
Sven Franssen