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Strategies & Market Trends : John Pitera's Market Laboratory
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To: isopatch who wrote (16852)3/20/2015 9:05:41 AM
From: The Ox1 Recommendation

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Hawkmoon

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When QE was implemented here in the US, it weakened our currency. Look what European QE has done to the Euro!

As the US dollar has regained it's strength, it's happened at a time where a number of supplies of important commodities have also grown dramatically. Since most commodities around the world are still based on the US dollar, it's had a "doubling" effect on prices. The "deflationary" spiral that everyone loves to talk about may not be anywhere near as severe as it appears due to the above combinations. Oil is more plentiful. Coal in in a glut. Iron ore production has soared. Agricultural supplies in corn, wheat and many other areas are also increasing, which has helped to keep their prices low. Now add in the strength of the dollar and we're in a unique period where inflation should be held in check for a while.

If rates rise in the US but at a very moderate pace, it doesn't have to necessarily add additional downward pressures. If it's done carefully, with one eye for the other macro issues to make sure our moves aren't disconnected from the rest of the world, then we can have an extended period where rates rise back to a more normal range without crushing a weak global economic environment.
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