sorrentocapital

Potash, Mosaic Are Looking Fertile

First, the targetted fed funds rate will most likely go DOWN again tomorrow. Second, rates will likely stay flat for a protracted period thereafter. Third, even if the fed targets a higher fed funds rate, in the future, it will be far in the future. Housing is the absolute make or break issue. Higher interest rates skins that cat, for certain. The inflation that is at risk today can not be fixed with higher rates or stronger dollars. A little, yes. However, the primary driver of inflation is worldwide demand. It is what it is. All we can do is increase supply to meet that demand (hint- you can use something to help grow more grain per acre......it starts with an f).

Ok- on the issue. The strengthening (assuming that will happen) of the USD will have little affect on fertilizer for crops. Who buys this fertilizer? The only currency that will deflate relative to the USD will likely be the Euro. The Yuan WILL not deflate relative to the USD. In fact, it will continue to strengthen. The Rouble will continue to strengthen. The Real will continue to strengthen. The canadian dollar will not deflate much as it is also a petro currency. As for companies like POT (Canada), do you think they will sell more or less to America when the USD is stronger?? Let's see, dollar stronger vs. Canadian dollar= things from Canada on sale.....I'm guessing they sell more, since it's on sale.

In my opinion, that's a very illogical argument, but sadly, one that I have heard before.