How Much Is China Responsible For Oil's (and Other Commodities) Run Up?

A lot, according to this well argued post on Coyote Blog. I won't even try to summarize it. Just read it.

I am not at all embarrassed by not predicting the massive hike in oil prices over the last couple of years - I still stand by my earlier statements that predicting the future price of oil is a fool's errand (now you can analyse what the market believes the future price of oil to be, but that is a different matter). But what has left me a little red-faced is underestimating China.

A couple of year's back I made the off-hand comment to a bullish-on-China colleague that I thought the whole massive-growth-in-China thing was likely overrated because:

1. It reeked of media over-hype.



2. Communist countries have a history of releasing inflated economic statistics (think the USSR under Stalin).

But the more I see commodities rise and see consumption data from China (from non-governmental sources), the more likely it seems that I was wrong.