A HOPEFUL VIEW

Rotorua Morning Post, Volume 2, Issue 587, 19 July 1933, Page 5

A HOPEFUL VIEW

(Press Assn.-

commodity prices not due to inflation boom ENGENDERED BY OPTIMISM

— By TeAegraph — Copyrlgnt) .

(Eec. 9.10 p.m.) London, July 18. The Westminster Bank Review discussing the recovery of commodities says : — "It is only a half truth to call the rises . an inflation boom though the American monetary policy has large]y been responsible for the increase. There has been no actual inflation. Even if the rises of the. past four weelcs should be followed by a setl>ack there is ground for confidence that this would only be partial com]>ared to the previous fall. Prices liavs only rise-n moderately. The forward drop has been counteracted by the optimism engendered by recent events. Consequently the rising prices instead of checking the demand has nn/JmivnffPfl lf".

The great danger of the situation is that the supplier may seek to force tho prices up too high and thus catch the demand, or that the prices may cause an over-rapid breakdown of marketing and production and restriction schemes. The sooner freemarketing and production is renewed the better, but it must come in an orderly fashion. If the. dangers are avoided there is reason to believe, Ihough difficult times are ahead, that the recovery of commodity prices :narks a definite turning of the corner.