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楼主 |
发表于 2009-6-16 09:15:51
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However, in the short term, market factors can derail commodity prices from the fundamental trend from time to time. As such, the most important factor is the value of the US dollar, which is the currency used to denominate the prices of most commodities. Given the commodities' non-renewable nature, a devaluation of the dollar would certainly lead to inflation in commodity prices, and vice versa.
We have found consistent correlation between the movements of the nominal dollar index and the crude oil price, albeit with a lag of a month or two. For instance, the dollar's devaluation decelerated in January 2008 and a month later, world oil price began to rise at a slower pace, followed by a plunge in the next two months. Since February 2009, the dollar index has gradually lost its upward momentum, and a rebound of commodity prices was later witnessed.
Similarly, US inflation could also lead to rising commodity prices, although the reason is not exactly the same. As investors anticipate future inflation, they quickly turn to the commodity market in hopes of locking in prices at a lower position before they are pushed up by the overall inflation.
Dollar devaluation and US inflation often come hand in hand because they share a common root of excess dollar liquidity. Now that the US Federal Reserve (Fed) has set the target rate at zero and has been aggressively using quantitative easing to pour liquidity into the economy (e.g., purchasing treasury bonds from the marketplace), the risk of the Fed's losing control over liquidity – and the subsequent dollar devaluation and inflation – becomes a reasonable concern. As concerned investors resort to buying commodities to keep the value of their money, the expectation of inflation is self-fulfilled. It could even evolve into stagnation if the economy fails to pick up. |
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