Nick, the CRB index is in a bottoming process - the JOC index, which leans toward industrial commodities is a front runner and has already turned up considerably. inflation, or rather the fear of it, is back. as i am a well-versed prophet of doom and gloom, i hereby propose the following scenario: the misplaced fear of inflation will induce the Fed to hike rates another 50bp's. this will contribute greatly to the global money destruction process that has started with the Thai Baht crisis and is still ongoing, contrary to popular belief. all of a sudden, the Fed will be faced with the beginnings of a deflationary depression, possibly hard on the heels of a forceful reality-reconnect of stock prices. however, by then it will be too late to stop the rot, as deflation will rage worldwide, and the worst bear market of this century will strike. short sellers will be blamed. By that time the upturn in the CRB index will be a distant memory at best.
otoh, we could be in a new era, where new technologies bring ever-accelerating productivity gains, inflation remains tame, deflation is a myth and the bull market merrily keeps on confounding the bears.
take your pick. |
