QE2 marks the beginning of the commodity bubble
November 08, 2010
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It is only the beginning... if QE1 is just to stop the economy from collasping.
QE2 ignited the dispute of currency standards and G20 becomes G19 + 1
US talks of strong dollar is recongized as a big lie by foreign central banks. Central banks in exporting countries have to protect their own exporting industries by printing matching amounts to compensate the inflow USD. Then these central banks will dump USD and buy golds.
Because of currency debasing wars is in the play, all the easy money from QE2 and matching monetary easing oversea will trigger a rush for precious metals, commodities, durable goods, energy, and real estates.
It won't mean much for the swing of USD since QE2 any more. Stronger USD is mainly made by defensive play of currencies like CNY and JPY by their central banks.
Hold onto your commodity stocks. We are going to have a great year or two.
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$1500/oz gold, $30/oz silver by the end of the year.
Crude oil @ $100+ , gold $1700, silver $40 next year
Deflation camp lost big time...
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