Perhaps even more interesting than the remarkable increase in the Australian Securities Exchange metals and mining index was the fact that no one seemed to notice the big bounce which saw spectacular increases in some share prices.

BHP Billiton, for example, jumped by $A2.78, a move which translates into an $8.9 billion increase in the stock market value of Australia’s biggest miner.

Rio Tinto rose by $3.96, adding $1.7 billion to its ASX value and Fortescue Metals Group added 50c, lifting its stock market capitalisation by $1.55 billion – which translates into roughly an extra $500 million on the personal fortune of FMG’s biggest shareholder Andrew Forrest.

So, asks Blower, if the jump in values was that spectacular and the mining market enjoyed its best week in years, why weren’t there any celebrations?

One answer is that it might have happened so suddenly that no one was looking – a possibility given the sharp political focus on everything happening in Australia today as the country limps towards a make-or-break budget tomorrow for a government which has been busy shooting itself in both feet – repeatedly.

Another – and this is the fascinating possibility – is that the 9.44% rise in the metals index and the 8% rise in the gold index had nothing whatsoever to do with underlying values and everything to do with currency fluctuations and a dramatic rotation of investment funds out of banks and back into mining shares.

In other words, what the share price movements were reflecting was a speculators’ picnic as hot money continued its mad dash around the globe seeking higher yields (any yield?) in a world of ultra-low, or even negative, investment returns.

Reports that the Carlyle Group, a private equity funds manager, has made a bid for the Northparkes copper mine being offered for sale by Rio Tinto is a perfect example of money which would not normally seek a home in the high-risk business of mining being prepared to do virtually anything to generate a positive return.

The entry of private equity into mining has been tipped for several months with another big fund, KKR, also said to be running a ruler over Northparkes.

For mining companies selling assets this is a marvellous development because the number of potential conventional buyers has dried up and the entry of deal-hungry private equity funds could add significantly to the prices received.

For investors in private equity the appeal of owning a mine or two is that they might get a reasonable return on their cash, even if the risks have increased.

Perhaps it doesn’t matter what drove the market higher, or that the percentage increases are inflated by the fact that this is what happens when you’re working up from a low base. A rise, after all, is a rise.

But, there is value in analysing why the market recovered so quickly last week and what you find is both good news and bad.

The good news is that the possible entry of private equity meshed neatly with a fall in the value of the Australian dollar which will translate into higher Aussie-dollar income, on conversion, for all exporters selling in US dollars – and that means most miners and farmers.

The bad news, which is more a case of worrying news, is that while currency gains are welcome they do not represent a real rise in the value of the commodities being sold.

Iron prices have not risen over the past week. The copper price is up marginally. Zinc, lead, nickel, uranium and gold have fallen in US dollar terms.

To best understand the uncertain foundations of last week’s rise in the mining market take a close look at the 8% rise in the gold index, a rise achieved despite a $US19 an ounce fall in the gold price.

It was the falling value of the Australian dollar and an expectation of further future falls which attracted investors to local gold stocks, an entirely understandable move but not one based on strong economic fundamentals.

In other words, last week’s share-price rally could be the start of something sustainable, or it could simply be that mining has become the latest home for hot money chasing yield.

What’s really needed is a sustained increase in global economic activity which will bring with it a genuine increase in demand for minerals and metals and there is no evidence of that happening – yet.