Bloomberg Discusses China's Commodity Boom Of 2016

Are the wheels coming off the Chinese commodity market? Over the span of the past 2 months, daily turnover on China's futures markets surged by the equivalent of $183 billion. According to Bloomberg, this data makes "volume on the Nasdaq exchange in 2000 look tame" and even outpaces last year's Chinese stock bubble. Bloomberg added that commodity investors were initially attracted to China's economic stimulus and industrial reforms that would result in a shortage of construction materials. However, the group-think resulted in a "full-blown commodities frenzy with littler bearing on reality." In fact, investors traded enough cotton in 1 day in April that could have been used to make 1 pair of jeans for every person on Earth. Naturally, the Chinese authorities are active in introducing measures to prevent surging commodity prices at a time when speculators are "retreating as fast as they poured in." "You have far too much credit, money sloshing about, money looking for higher returns," Bloomberg quoted Fraser Howie, the co-author of "Red Capitalism: The Fragile Financial Foundation of China's Extraordinary Rise" as saying. "Even in commodities where you could have argued there is some reason for prices to rise, that gets quickly swamped by a nascent bull market and becomes an uncontrollable bubble."