Yves Smith has a recent post on whether commodities, particularly oil is finding favour as anti-dollar. In the comments, you will find some arguments about oil demand and fundamentals.
I think Oil price movement were retro-fitted to fundamentals. In other words, the movement in oil was primarily as a value retainer against dollar. But two things happened that twisted the outcomes. First, dollar strengthened (for whatever reasons) and second more money rushed into oil taking it too far away from retro-fitted fundamentals.
Now we are about to witness a second flight into "value". Are we foreseeing another commodity upswing? I think we need to watch Oil, Gold and other key commodities. But one thing is sure - perishable agri-commodities will not be able to retain value for the length of time that we are looking at.
Time to watch out and hold tight!
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