drbubb Posted November 3, 2014 Report Share Posted November 3, 2014 The US, its Dollar, and the premature celebration SWINGS and Roundabouts ... will the Ruble and the Dollar reverse direction together? Right now, it must seem like the USD has won the war. But will that last? Here's the USD measured in Rubles - vs. the Bear Oil etf ... update So weak was the Ruble, that late last week, the Russian central bank made a "surprise" rise in rates - to 9.5%! This could be very damaging, at a time when the Russian economy is being depressed by low oil prices - their biggest export. It just shows how ugly the choices get during the downphase in a cycle. And when you read THIS (below), you may think: there's little to endanger the dollar now: Fall in Commodity Prices welcome - SCMP main editorial today "The go-go years of the commodity super-cycle now feels like a distant memory." "Across a whole range of industrial commodities, prices have been falling, and in some cases dramatically, since the start of this year. Meanwhile, the price of gold, the world's favorite precious metal has stayed flat after a brief spike early in the summer." "Coal, cotton, corn, iron ore, and copper are all at multi-year lows. Oil has dropped to US$80, after averaging well above US$100 since 2011. The benchmark Bloomberg commodity index has fallen 8 per cent this year and hit a five-year low." "Many factors contribute to the fall in prices. A significant slowdown in China's economy, long the world's key commodity buyer is a key cause. A glut in supply is also to blame. A sign of a sluggish world economy, falling prices are a symptom..." The article goes on to say that a study by the IMF shows that cheaper oil is "a net positive" for the global economy. ... and ends thusly: "The world has lived too long with high commodity prices. Now is a welcome time for consumers to enjoy some benefits from falling prices." ... Yeah. Sure. But for how long. Does anyone else think celebrating seems just a bit too premature. Is inflation truly dead? Will oil stay down, or might something like a shrinking of capital investment into Fracking reverse the present trend ? (4 Days later / intraday 7-Nov.2014): == DXY made it up to 88.00 ... update : Friday close: 87.566 DXY - all Data ... update Link to comment Share on other sites More sharing options...
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