Ah no valen1828 - the commodity prices ran ahead of themselves...

Ah no valen1828 - the commodity prices ran ahead of themselves due to the lead time to bring on supply from projects - demand too high - mismatch on supply. Companies risk adverse have to see demand actually occur.

So prices ran ahead as new supply sought to catch up. This pushed inflation in China. The GFC happened in the middle of all this as we have to unwind the largest debt bubble in history. Keynesian economists think intervention will work (still) but the model is broken! Add more debt to offset the capital destruction only buys time but the piper has to be paid.

So demand has fallen off as supply kicks in that is the reason for the end of the boom not the price of trucks or consumables as you simplistically suggest. Supply usually kicks in higher as business seeks out the market and the most robust projects win the day as prices fall - inevitably.

Prices had to fall and our government policy could not have been more poorly chosen or timed - totally incompetent. Brazil and Africa will see the best action and so Australians can get to collectively "own" resources sitting in the ground doing nothing to assist us. Dutch disease alright - cure will take a long time and involve a huge amount of pain.

I am not saying all mining dies here just that we missed opportunity. We do have many robust projects but the line of viability was falsely moved in the wrong direction at the wrong time.

Debt markets always had to correct and go through the coming upheaval so this was totally predictable. Cost of capital is going up. Supply of capital crowded out by governments sucking available credit. Welcome to the new normal - only most do not understand it yet. I think the boys at Variant did a great job have you all see the whole PDF?

Cheers,
CW
DYOR&DD