Indicator flashes warning on China economy

There’s an indicator flashing a big warning signal about the Chinese economy right now and if it’s correct, it could send prices for copper and iron ore reeling.

“Money supply is showing us a strong correlation between money supply and commodity prices,” said Atul Lele, chief investment officer at Deltec International, which has $5 billion in assets under management.

His analysis shows that about six months after the supply of funds in China, as measured by M2, rises or falls on a year-over-year basis, metals see a similar rise or decline in prices.

Author: Rayan M

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