You may have noticed–and been puzzled by–the lack of volatility in the U.S. stock market. Despite uncertainty over the timing of any interest rate increase from the Federal Reserve, worries/hopes over U.S. economic growth, gyrations in the price of crude and other commodities, a continued slow down in the Chinese economy–should I go on?–U.S. stocks trade near their all-time high with extremely low volatility. The CBOE S&P 500 volatility index, the VIX, hit an intraday low of 13.04 on Friday before closing at 13.94. That’s the lowest level for what is often called the fear index since it hit 12.50 on April 20.

With all the uncertainty I’ve summarized above, why is no one hedging the S&P 500?

But that question and that lack of volatility is dwarfed by what’s going on in China’s mainland Shanghai market. The Shanghai index has been trapped in a narrow 50-point trading range near 2800 for the last two weeks and more, and volatility in the index is at its lowest level since 2014. Volume has dried up with the value of A shares changing hands on the Shanghai market the lowest since last October. Turnover, in fact, is 80% lower than at the peak in 2014.

And all this while the Shanghai index is down 20% for 2016 to date, when the price-earnings ratio on the exchange remains stubbornly high, and when almost every bit of economic data from China says that growth in the Chinese economy still hasn’t bottomed.

All the evidence that I can find argues to me that the People’s Bank and other government regulators are at work damping stock market volatility. Margin debt, which would encourage speculation when the market has upside momentum and mass selling when the market weakens, is down to 2014 lows, for example, and the People’s Bank looks to be back in the stock market daily buying shares whenever it looks like the 2800 level for the Shanghai index is threatened.

We know from experience that while it is possible to damp volatility and support share prices for a while, it’s not possible to do so forever. And the results of that damping can be unexpected outbreaks of volatility and the shift of volatility from one financial sector to another.

Today brought a very strange outbreak of volatility in the futures on the CSI 300 index of the A shares of 300 companies that trade on either the Shanghai or Shenzhen stock exchanges. Futures on that index plunged by 12.6% in a matter of minutes and then as quickly bounced back. (The cash CSI 300 index didn’t move.) The likely explanation is that a big hedge trade triggered the move in the index. That seems quite possible since short positions on the index, using vehicles that trade on other exchanges such as Hong Kong, have climbed to record highs as overseas investors bet that the continued decline in the yuan, rising corporate debt, and the continued slowdown in economic growth, will lead to a break down in the Shanghai and Shenzhen markets and a repeat of the volatility of 2008 and 2015. (Short interest on the iShares China Large Cap ETF (FXI) has climbed to 80%, according to ZeroHedge.)

The suppression of speculation that might cause volatility in China mainland stock exchanges doesn’t mean that the People’s Bank has managed to suppress all speculation. Money not going into speculation in China’s stocks–and bets that Morgan Stanley will add China’s equity markets to the MSCI Emerging Markets Index next month–has flowed into speculation in commodities such as cotton and iron ore. I think, and this is speculative thinking on my part but it makes sense to me, that the rise in the price of commodities is one reason that we’ve seen such low volatility in U.S.and other stock markets. After all, if commodity prices are rising, isn’t that a sign that growth in the global economy is picking up? And if growth is picking up, isn’t that a sign that the rise in the prices for oil, and iron ore, and cotton is sustainable?

Of course, if it’s not and if those price increase are actually the result of speculative cash flowing into commodities markets instead of Chinese stock exchanges, then we’re likely to see the prices of those commodities retreat and the volatility in U.S. stocks bounce back to something like the 22-24 range that has been the long-term average for the VIX. Iron ore, for example, climbed 23% in April before sinking 24% in May. The VIX closed today, Tuesday, May 31, at 14.19, up 8.16% on the day.

I wouldn’t count volatility out just yet. (For more on volatility see my new book Juggling with Knives on what I call the Age of Volatility.