Several years ago, many of the discussions in SEIA’s Investment Committee (IC) centered on whether the commodity “Super Cycle” of the last decade had finally come to a close. Long-term investors will recall that the period of the 2000s was marked by outperformance from commodities due in part to strong Emerging Market economies. China’s rapid ascension gave a boost to any commodity needed to urbanize a vast and populous country (copper and iron ore to build, coal to run the power plants that provide electricity, and crude oil to fuel a new car-buying nation). The influx of capital into these economies strengthened their currencies at the expense of a weaker U.S. Dollar. These stronger currencies could then be used to buy more commodities to build more things, and the “super cycle” was on.
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