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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: SouthFloridaGuy who wrote (19978)	12/30/2004 9:28:56 PM
From: mishedlo	Read Replies (4) \| Respond to of 116555

Mish, long-term Deflation will occur, I agree. But this cannot happen until the dollar stabilizes and the yield curve flattens a little more. Chartwise, Commodities prices are setting up for another run as the dollar enters free-fall. We have have a way to go here. Regardless of what Russ or anyone else thinks there is very little doubt about deflation IMO. If everyone was worried about it it might not happen. Virtually NO one other than you, Heinz, myself and a few other believe in it. ZERO big names in that group. We are however at a very critical juncture. I do NOT think commodities are setup for a big run here. Not even Jim Rogers thinks that. We can easily have a hard landing in China. Not saying we will, I am saying we can. Right now we have a situation where China is manufacturing primarily for US markets and other export markets. If that demand dries up, tell me what commodities will rise. I do not think they will. Oil might, but steel? Coal? Copper? Tin? etc etc etc. Food is another story. Bean rust can easily cause soaring bean prices. Commodities are a mixed bag here IMO. Oil can easily fall another $10. I am not saying it will, I am saying it CAN. Why can't it? What I will tell you is this. If China has a hard landing and/or commodities crash Buy BOTH hand over fist in whatever way you can. China is THE up and coming global giant and can not be stopped. My basic point is this: Do NOT underestimate the potential worldwide deflationary affect of a US and UK housing crash. Mish