Commodity inflation explodes but why is bond market looking so bullish?
Fred Day
Oct. 17, 2009

Strange things are happening in the US Treasury market and the commodity inflation front. Normally bond market goes south as commodity inflation take off on the upside. But now the commodity inflation is rampant. The CRB index is accelerating on the upside confirming a rejuvenated bull market in commodities. The softs, the energy, the grains, the metals are all on a consorted move on the upside. But the bond market is also looking bullish. What can be the reason?

The state of the US economy is very strange. The main problem is in US Dollar. It is losing its intrinsic value very rapidly with fast expanding budget deficit. It is confirmed with exponential growth in gold prices.

The stimulus money has failed to create any real growth in the economy other than inflation driven short-term relieves. The commodity inflation is driven by the weaker dollar and future expectations of much lower value of dollar compared to gold or Euro. The bond market is looking bullish because of collapse of the economy into deep depression.

Economic 101 needs to be rewritten. Next several years, perhaps decades will see deep depression in the economy with hyper commodity inflation. The means there will be rapid drop in standard of living, loss of jobs, and commodity inflation.

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Economic 101 needs to be rewritten. Next several years, perhaps decades will see deep depression in the economy with hyper commodity inflation. The means there will be rapid drop in standard of living, loss of jobs, and commodity inflation.
READ MORE>>

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