While commodities go parabolic, the Chinese stock market has been cut in half.  Stocks don’t fall 50% or more if something in the economy isn’t happening. 

 
And if something is happening in the Chinese economy, what does this mean for commodity prices?  With oil up ~1300% over the past decade, and specific commodity stocks going parabolic and partying like its 1999 again, have we entered the final mania phase of the commodities bull market?

I have a subscription to Strategic Forecasting.  Stratfor has been bearish on the Chinese economy for the past few years, primarily because of the state of the financial system in China.  In a note today, they argue that Chinese economic growth has peaked.  The economy is not necessarily going to collapse but Stratfor argues that at best, it will plateau. 

Stratfor notes that

• The government is tightening monetary policy, primarily via the reserve ratio, which is now 17.5% of deposits, double that of about a year ago.
• Sequentially, exports have improved but have fallen 10% from last May.
• Wage inflation is rising
• China’s terms of trade vis-à-vis oil exporters is deteriorating.
• The financial system remains a mess.
• The deputy head of China’s National Bureau of Statistics has said again that growth has passed its peak and the days of 10%+ growth are over.

A slowing Chinese economy is less likely to support $135 WTI.