MUMBAI: The liquidity boost and various macro-economic measures being adopted to fight the sub prime crisis, which has sent stock and bond markets on tenterhooks across the world, can soon fuel a commodity bubble, a top UNDP official said on Wednesday.

"I will not be surprised that 2-3 years from now, we realise that the liquidity and macro boost generated to fight the sub prime housing crisis ended up fuelling a commodity bubble,'' said the Administrator of the UNDP Mr Kemal Dervis at an Exim Bank fun ction.

"We may again, then, be faced with fighting the negative consequences of an unforeseen downward adjustment, this time in commodity prices," he said. He was also critical of strong expansionist US macro policy response to crisis situations saying such po licies carry dangers of inflation. Tracing back the various economic crises since mid-90s, he said strong US macro policy responses have led to one asset bubble being replaced by another.

After the East Asian currency meltdown in mid-90s, dot com bust came at the turn of the century, which was followed by mortgage-backed securities crisis from 2004 to 2007. "It may well be the commodities, that are now rising in price at an unreasonable and unsustainable rate," he said. This is fuelled again by underlying huge investment resources and accompanying liquidity available in Asia because of high savings rate, in the Middle East because of the oil bonanza and in the advanced economies becaus e of significant rise in the share of profits and high incomes in GDP. - PTI