History is filled with speculative frenzies—from the tulip mania of 1637 to the dot-come bubble at the turn of the century—but rarely has a mania ramped up so quickly as the Chinese commodities boom that’s happening now.
Over just two crazy months, daily turnover on China’s futures markets has jumped by $183B, marching past the headiest days of last year’s Chinese stock bubble, Bloomberg reports. What started out as a good bet—that China’s industrial reforms would lead to construction material shortages—has turned into a full-blown commodities frenzy with little connection to reality.
China’s regulators are trying to rein in the speculation by introducing trading curbs to prevent soaring inflation, but it’s yet to make an impact—last month Chinese investors traded enough cotton on a single day to make a pair of jeans for every person on the planet. [Bloomberg]
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