Commodity Supercycles.

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A micro thread πŸ§΅πŸ‘‡

1/ What is a commodity supercycle?

They are near decade long periods where commodities trade well above their price trend

supercycles are rare

Going back 100 years, Only 3-4 supercycles have been identified & each was tied to a transformational period of economic development.
2/ A one-two year rally in commodity prices is NOT a supercycle, rather could just a rebound from an imp. event as what even happened after the 2008 great recession.
3/ Two commodity supercycles have occurred since the end of World War II.

The 1st started in the mid of 1960s & lasted through the 1970s.

Likely driven by a collapsing US dollar, higher inflation & 2 oil price shocks.
4/ Why US dollar is an important monitorable?

Raw materials are almost always priced in US dollars.

When the value of the dollar drops, it costs more dollars to buy commodities. At the same time, it costs a lesser amount of other currencies when the dollar is moving lower.
5/ The last supercycle lasted from the mid-1990s until the 2008 financial crisis.

Reason? 'BRIC'

During this time, Brazil, Russia, India & China (BRIC: 40% of the world's population) were on a path of rapid industrialisation, which required an abnormal amount of raw materials.
6/
So, How many people predicted the last supercycles? Not many.

Supercycles are best defined in hindsight.

So, it will be years from now before we truly know whether we are witnessing the start of a new commodity supercycle.

End of Thread.

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πŸŒΏπ‘»π’‰π’† π’”π’•π’π’“π’š 𝒐𝒇 𝒂 𝑺𝒕𝒂𝒓 : 𝑫𝒉𝒓𝒖𝒗𝒂 & π‘½π’Šπ’”π’‰π’π’–

Once upon a time there was a Raja named Uttānapāda born of Svayambhuva Manu,1st man on earth.He had 2 beautiful wives - Suniti & Suruchi & two sons were born of them Dhruva & Uttama respectively.
#talesofkrishna https://t.co/E85MTPkF9W


Now Suniti was the daughter of a tribal chief while Suruchi was the daughter of a rich king. Hence Suruchi was always favored the most by Raja while Suniti was ignored. But while Suniti was gentle & kind hearted by nature Suruchi was venomous inside.
#KrishnaLeela


The story is of a time when ideally the eldest son of the king becomes the heir to the throne. Hence the sinhasan of the Raja belonged to Dhruva.This is why Suruchi who was the 2nd wife nourished poison in her heart for Dhruva as she knew her son will never get the throne.


One day when Dhruva was just 5 years old he went on to sit on his father's lap. Suruchi, the jealous queen, got enraged and shoved him away from Raja as she never wanted Raja to shower Dhruva with his fatherly affection.


Dhruva protested questioning his step mother "why can't i sit on my own father's lap?" A furious Suruchi berated him saying "only God can allow him that privilege. Go ask him"