Libor 3 month chart saying:
1.clogged credit markets are back again.2.we are temporarily out of woods after Lehman bankruptcy back in Sept after the derivative markets.
Here's the concerns again:
1.with low interest rates will the bubbles pop up once again ?
2.Is inflation around us with 0% lending ? or still the deflation dominating, I think we are going through the 2nd one but once this cycle completes then the inflation will on rampage.and what fed has to say about the economy outlook link
Dollar to me is cliff diving which could not only inflate the commodities but also devaluing overall US economy during this downward spiral. Initial run during last summer is purely on de-leveraging of commodities basket in different foreign indcies and converting them from different currencies back to US dollar coz banks have to cover up their losses on their balance sheets which not only created artificial demand but also stampede during this process.
The banks are currently undergoing various forms of stress testing, which, good, bad or indifferent are having the effect of reassuring the investment community that all is well as evidenced by the improvement in the stock prices of the banking sector, however, the decline of the US Dollar appears to be accelerating and there is no fundamentals to drive US dollar.
Most of Commodity related ET F's and stock are coiled up big rebound in 2010 and beyond with the government intervention. Watch out: DBA DBC MOO GLD SLV.
Oil is going to benefit from the weaker dollar and look at data it's struck between $48-$56 for almost 2 months now.But breaking peak will easily take us to $70 in heart beat. So watch out closely for the oil related stocks for this summer as people will flock around during this part of the year.
