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As is the case with most commodity prices these days, the price of crude oil is reversing a good deal of what it lost last year. I think the commodity price signal is a powerful one, because it tells us that 1) global demand is reboundng, 2) deflation is nonexistent, 3) there is no shortage of money, 4) monetary policy is becoming inflationary (i.e., the Fed should be implementing its exit strategy now, not later, and 5) the crisis of last year was temporary in nature, not a sign of any long-term structural problems.
4 comments:
I'm starting to agree that we may see a massive rebound in the economy but my bets are on inflation/commodities/non$ and an inept Fed without the political will to unwind its balance sheet.
This whole thing could get really hot, really fast. Housing market might be starting to bubble again before it has even taken off.
Put on your seat belts, cuz this here is the wildest ride in the wilderness.
Scott, your really zero in on predictive indicators that support the ideas you present. Thank you for sharing your outstanding work. You are a daily must read
I concur with ronrasch. Thank you very much for all your work. I live and work in Jakarta, Indonesia, which is half way round the world and I read your blog each morning before the Indonesian market opens!
I agree with the point that the Fed should start implementing the exist strategy, but I'm not so sure that the last year crisis was temporary and not an indicator of significant structural problems
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