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News Link • Economy - International

Canary In The Iron Ore Pits: Prices Plunge Below $100; Massive Glut Building

One vector of special salience is the global iron ore market where prices have now punctured the $100 per ton mark to $94, and are down 50% from a peak of $200 in 2012.

The action here is not just another commodity cycle, but instead is a proxy for the global credit bubble, China department. During the course of its mad scramble to become the world's export factory and then its greatest infrastructure construction site, China's expansion of domestic credit broke every historical record and has ultimately landed in the zone of pure financial madness. To wit, during the 14 years since the turn of the century China's total debt outstanding–including its vast, opaque, wild west shadow banking system—soared from $1 trillion to $25 trillion, and from 1X GDP to upwards of 3X.

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