A new "big inflation" play? I doubt it and here's why.

Is the next story going to be a new "big inflation play" that sends commodities back up to the stratosphere? I doubt it, and here's why.

(1) You're not going to see >9% growth in China again. They're too close to the demographic rollover, too many of the easy productivity gains have already been made, and the leadership now understands that infrastructure spending just ends up in the foreign bank accounts of local kleptocrats. Growing China gets harder from here on out: now it's about fighting internal corruption, reform of labour mobility, a close eye on the financial system, transitioning to a post-industrial service economy. Not sexy, market gets bored.

(2) I think you need EM growth optimism greater than that of 2009-10 to see another 2009-10 style commodity spike. The sentiment was what drove the commodity spike, and you'll need crazy sentiment again. And I think China won't provide it. And nobody else is big enough to replace them in such a narrative. And I doubt, despite feeling bullish Europe & Americas, that DM growth will be strong enough in the next couple years to push prices particularly hard - working through debt deleveraging is supposed to reduce the speed at which growth can increase. And I think you'd need prices pushed hard enough to overwhelm the speed of new supply generation before a price spike can occur.

(3) Even if there's a flood of money supply coming, it may decide this time to go somewhere else than commodity speculation. With big negative fears of China predominant now, I think the money might just flow into equities instead - or heck, even more into bonds.

Commodity prices could still inch up in future, and I bet on balance they do, but it'll probably be slower and more measured this time than in the last commodity bubble. Frankly, I think the exciting era is over for commodities, unless we can get a great surprise somewhere.