Commodity prices and emerging markets will unravel before the end of the year, and it is highly likely that the developed world will see negative headline consumer price inflation within 12 months, believes Albert Edwards, global strategist at Société Générale.
“Investors believe they have found a safe haven in commodities and decoupling emerging markets – and commodities have become totally detached from fundamental and cyclical logic in the process,” he says. “The structural arguments supporting these bubbles will turn to cyclical sand.” Mr Edwards believes one factor will trump all others to destroy the emerging market and commodity boom.
