Commodity cost tendency is anticipated from the U.S. shackles

Over the past couple of months, product charges and the U.S. dollar in the past couple of decades in the pattern of “negative association between”, that there have been some subtle changes.

Here, we Commodity Index and the U.S. dollar indicator as an example.

December 5, 2008 to 18, during a short period of eight trading days, the dollar index fell from 88 points to 77 points, and in March 9, 2009 to 89 points again, and then in the March 19 or Back to 82 points. The Commodity Index declined to follow the fluctuations in the dollar index has remained at 330 points to 360 points, a narrow range of fluctuation between.

Take a gaze at the gold market. Over the past couple of decades, the U.S. dollar gold cost and between the “negative association between the” more prominent. However, in latest months has furthermore altered a lot. That is, if or depreciation of the dollar, gold charges still hovering at high level.

Why is there such abnormal changes?

Trend from the purpose of scenery, an unprecedented worldwide fiscal critical purpose is clear to observe the world, the global bulk goods denominated in U.S. dollars as the only currency is full of defects and community, in augmentation to the United States to its creditors fully completed irresponsible stance and plays throughout the world will unavoidably lead to efforts to change the position of the global monetary system.

The weakening United States dollar, reflecting the bulk commodities in the international market is bound to be a confusion – can not find a sense of direction. It also reflects the U.S. dollar and commodity prices that the old relationship between the break.

From another point of view, the rise of trade protectionism forces once again, competitive devaluation of the currency is bound to become the Government’s policy options. The World Bank issued a March 17 report notes that: Since the financial crisis, countries all over the world, or the introduction of protectionist measures to be introduced about 78, of which 47 have been implemented. In the implementation of the measures, including the devaluation of the currency.

Competitive devaluation of countrywide currencies, and trade security guidelines of the introduction of regular, effecting in the foreign exchange market exchange rate between the assorted monetary family (exchange rate) modifications regularly, but the rate increase. Such market circumstances, in rank to hedge for the intent of making the investors to stay away from the foreign exchange market, and goods market hedge turn.

If this is the superior feeling of the market risk, and that product charges will not gaze at the U.S. face. That is to say: Whether it is or is depreciated dollar, product charges will only rise. At the identical time, if this occurs, then the power of nationwide currencies, there will be through the buying power of products to be reflected.

Right now, this matter of course, there is no outbreak, it is because commodity markets through the practice of hedging the market has yet to become commonly acknowledged, but the future? I think the possibility does exist. At the very least, the current in the international financial markets appear worthy of serious concern to all kinds of chaos. In fact, this is also a large number of people to judge the U.S. because of “water” and if there will be a global “stagflation,” a major concern.