Rio Tinto: Commodity Prices Could Drop to New Lows
The Pragmatic Capitalist submits: How’s this for a contrarian view? While most people think China’s roaring growth will power commodities and inflation higher in the coming decade Rio Tinto (RTP) isn’t so sure. The world’s third largest commodity company says markets continued to show stability in the first half of the year, but is growing increasingly concerned that a sustained slowdown in China in the coming decade could send commodity prices to new lows. Rio’s CEO Tom Albanese admits that prices could also see new highs, but he is more concerned about the potential of a sharp slowdown in Chinese growth. The Sydney Morning Herald elaborates: "Commodities markets are entering a new age of volatility that could involve dips as low as those seen during the global financial crisis”, says the chief executive of Rio Tinto, Tom Albanese. Mr Albanese predicted a sharp slowdown in China’s trend GDP growth rate to between 6 and 7 per cent for the next decade, overlaid by “higher amplitude” financial market cycles associated with Western economies unwinding their deep imbalances.”Complete Story »
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