Analysts: Commodity Prices Will Hit Record Highs

Xu Bi

On September, the 21 session of the Federal Reserve interest conference was held, and a statement after the meeting was issued.

Looking at the full text, we can see that the Fed has made preparations for the rapid rise in US dollar liquidity. Therefore, they suggested that, in the longer term, the level of potential inflation indicators is somewhat below what FOMC believes is the most consistent with its mission of maximizing employment and stabilizing prices.

He said that on the one hand, the continued rise of global US dollar liquidity means that more and more money is reflected in the "hard asset" price represented by the real estate market and commodities, which will continue to rise.

This process will cause huge liquidity shocks. When the money flows into emerging markets, it will bring a new round of asset bubbles.

equity market

And the property market, which drives the total assets of the US residents to rise, will increase consumption under the support of the wealth effect, which will bring positive stimulation to the growth of the global economy.

The expansion of private enterprises may further accelerate, resulting in further demand for commodities. This demand is reflected in the price, namely, the high point of the commodity index has been trampled underfoot, and eventually brought about cost push inflation.

He said that the overall price of commodities such as nonferrous metals is only a matter of time.