There is a big "if and but" in this forecast from the China Central Bank.
If the government stimulus regenerates aggregate demand, we will see a rebound in the world economies and prices of industrial commodities, as well as gold which will be a hedge during the subsequent monetary inflation.
But if it does not, we may be turning Japanese, and suffer at least a few lost years.
Reuters
China central bank sees rebound in metals, new gold peak
by Zhou Xin, Langi Chiang and Simon Rabinovitch
Fri Mar 13, 2009 8:19am GMT
BEIJING, March 13 (Reuters) - Copper and aluminium prices could rebound in 2009, while gold might scale a new peak and oil could chalk up big gains in the second half of the year, the People's Bank of China said on Friday.
In its annual international financial markets report, the central bank said it expected global demand to continue to weaken this year but held out the hope that the forceful policy response of governments could lead to a turning point in the world economic crisis.
"Senators disturb us by reminding us of the possibility of large numbers swarming from China; but the answer to all this is obvious and very simple. If the Chinese come here, they will come for citizenship or merely for labor. If they come for citizenship, then in this desire do they give a pledge of loyalty to our institutions; and where is the peril in such vows? They are peaceful and industrious; how can their citizenship be the occasion of solicitude?"
Senator Charles Sumner, 1870