JasonC

Gold Hammered, Oil Slicked: Is This the End of the Resource Boom?

"What do you think the reason(s) behind the US dollar rally?"

The Fed is done, rates at 2% and wide spreads will rebuild financial balance sheets. Sure a few more weak institutions will fail, but it won't matter. Banks are forcing a huge cash flow in their direction and it will bury their losses. Once that all works through, the economy will recover as it always does. Markets know this, headline chasers and ideologues who only spin finance for political points do not and never will get it.

The commodity bubble is busted and it isn't coming back, any more than the real estate or dotcom bubbles. But the prices on offer for US financial assets right now, are dirt cheap, and the world's savings will come here to snap them up. Meanwhile, the restriction of credit to households is rebuilding savings and halving the trade deficit.

Markets are self correcting. Momentum traders never, ever get it, and are always wrong at the extreme of ever single swing that has ever happened.