A number of articles in the last few months have shown how China is buying up commodities left and right, Niall Ferguson tells us why:

Washington D.C. is too complacent about China’s ability to wean itself off the dollar.

The idea they don’t have anywhere else to go or would shoot themselves in the foot if there were a steep decline in the dollar or appreciation of their currency reassures many people in Washington ‘we can relax’,” he says. “An appreciation of the renminbi may reduce value of their international reserves but increases the value of every other asset the Chinese own,” most notably the commodity assets they have been buying all over the world.

Let’s face it; in a barter system a commodity would have more value than a piece of cloth that has nothing backing it.