<<The CRB,OIL,GOLD are screaming inflation but TNX and massive overcapacity say NO WAY. >>
MM, CRB and OIL are NOT screaming inflation. Oil is screaming conflict in the middle east; if oil was screaming inflation then natural gas would be higher and its not -- natural gas is a primarily domestic commodity and is mostly used in power generation and manufacturing (such as refining aluminum or fertilizer), and the price of natural gas falling despite a SHRINKAGE of supply is screaming deflation.
CRB is screaming (i) conflict in the middle east (since 17.6% of the index is energy) and is also screaming (ii) drought in the midwest (17.6% of the index is grains, which are FLYING in price, and 11.8% of the index is livestock, which is also going up in price since grains are a major input). 'soft commodities' (cocoa, coffee, orgage juice, and sugar) are also flying but i can't give an explanation why.
look at INDUSTRIAL commodities -- copper, aluminum, natural gas, nickel, to some extent silver, DRAMs in my opinion are an industrial commodity at this point -- prices there are generally FALLING.
btw, if you think GOLD and TNX are sending you different signals (as you know i happen to think they are sending the SAME signal, as i think gold is in fact signalling deflation despite the prevailing popular wisdom) then i would side with TNX, since TNX trades the entire cumulative value of the gold market before 10:30am every day.
Cheers |
