My thoughts are that stronger economic reports will strengthen the dollar as well as rally commodities. More expected demand = price bid higher. Either a recovery or more stimulus is coming. Maybe I'm wrong, but I believe the powers that be will sacrifice the dollar if need be to prevent a depression. Very bullish case to be made in my view for commodities right now. BTW, oil and gold have made a significant breakout moves and held their ground as the dollar bottomed and started going back up. Signals a change in expectations going forward? Not sure, but I closed my oil short for a profit to see what happens now.
Demand isn't there for gold at all. If you see, Indian gold imports which constitute retail demand is down over 40% YOY for the first time in over 40 years.
Almost every Gold company and even GLD etf is trading at a P/E of over 30.
Oil intrigues me even more. With nearly 10% and over 19% real unemployment, where is the demand for oil coming from? Global demand was never as much during the boom periods of 07-08 when oil went upto 145+.
This smells pure manipulation and nothing else. Big boys at it again. :-)
Australia theoretically was never in recession and was going strong. So is the case with china. US is different. Other countries have decoupled from US. US is and will continue to be in deflation for a long long time while the US consumer which forms more than 70% of the GDP resets their balance sheets and habits.
CPI numbers and many others that are floated around are all made up as you probably know. Do you really think housing has bottomed out? Ever hear shadow inventory that banks have tucked under their belts? Check out zerohedge and other websites to get real unemployment figures that are more than 20% compared to the skewed numbers reported by the govt every now and then. And then you have about a million job number reset happening early next year.
Not sure if you are living in the US or not, but i don't see inflation in the US.
The last CPI figure is showing deflation "right now". But the market is preparing for inflation in late November, December. Every single inflation flag has been ticked since middle Sept. The soft commodities has just begun rising. Then durable goods are further down the supply chain.
I can calculate inflation in REAL TIME, and I can tell you that monetary inflation began in middle September. The CPI numbers, when released are 6 weeks out of date.
So what I am telling you is, the November CPI (year over year) will be much higher than anyone expected. In December, we will see a higher inflaton number than last July.
Already, China and Australia are showing some inflation pressure, which is why Australia raised interest rates 50 basis points already.