The other side in this complex discussion about how to handle the next phase of the global economic recovery argues that we have at least a year to go before “normality” returns.

Who’s right is the tricky question, and the only correct way for miners and other commodity producers to handle the situation is to take what they can, but be ready for a downturn.

At the heart of the dispute is a question about bubbles.

More specifically, it’s about artificially inflated asset values triggered by the near-zero interest rate policies in countries such as the United States and the United Kingdom.

What worries some economists, and the handful of politicians who have the brains to think about these things, is that 0% on borrowed money causes an imbalance in how an economy functions.

Consider a few examples of how the world has become unbalanced.

In the US, clever investment bankers running hedge funds and rich private investors doing it on their own can toddle down to their friendly bank, borrow a fistful of US dollars at, say, 1% and play games in the commodity or foreign exchange market at minimal risk.

In fact, since the financial world touched rock bottom on March 9 after last year’s share market crash, enormous profits have been accumulated by anyone prepared to play this game.

Oil, a favourite speculative target, has risen by 150% in less than 12 months. Gold is up by almost 40% and house prices in countries that have avoided the worst of the global financial crisis, such as Australia and China, have been rising sharply.

There are many forces driving investors and speculators into hard commodities and property. The most obvious is that a lot of people have lost faith in government-issued paper money, especially the US dollar.

Better to own something tangible, such as a bar of gold, a house or a truckload of copper, than dollars that have tumbled in value and look like they will continue tumbling, as the US runs up a monstrous budget deficit and tries to repay its foreign borrowings in depreciating dollars.

China has an estimated $US2.4 trillion in American treasury bonds and other securities. Over the past year the real value of that horde of cash has slumped, and China is far from happy.

India, likewise, had a pile of US dollars in its official reserves which it swapped for 200 tonnes of gold last month.

The problem, which lies at the heart of the bubble debate, is whether cheap money, essential to encourage economic growth in crash-hit countries, has become more of a problem than the crash itself.

In other words, have the seeds of the next crash already been sown by the cheap money policies? And what will happen when those policies are ended – which must happen at some stage.

The hawks in the debate, those who want a tough stance, say that a worldwide policy of ratcheting up interest rates ought to start now, mimicking what has happened in Australia.

Doves, those who see the need to continue with low interest rates for longer, argue that more damage would come from raising rates too soon.

Dryblower confesses that he hasn’t got a clue what’s best, but he senses that we have entered a new phase in the aftermath of the global financial crisis, and that we are far from being in the clear of unpleasant shocks.

That’s why now seems to be a time of enjoying the buoyant conditions we have, a view shared by an astonishing number of company promoters and stockbrokers who are desperately scrambling to launch their new company floats before the tide of cheap money retreats.

A head count at the Australian Securities Exchange on Friday revealed 21 floats, roughly double the count of three weeks ago. Interestingly, 18 of the 21 were mining or oil floats, some good and some not so good.

The float stampede is a sign that some people reckon now is a good time to cash out of the recovery because (a) there is cash to take, and (b) next year might not be as good as the conditions we are currently enjoying.

Interesting times, aren’t they?

*Dryblower is a weekly column on ILN’s sister publication MiningNews.net.