Something strange is going on. Cocoa has reached his highest level since 1985. How come?
Because the currency, this commodity is denominated, is the pound sterling.
And the sterling is making lows not seen for many, many years versus major currencies. The central banks around the world have had a contest to see which could cut rates to zero the fastest (Japan doesn’t count; it has been a mess for over a decade). The goal in times of global slowdown is to devalue your currency to aid exports and jump-start the economy with cheaper relative prices and more money to spend in the system.
The dollar is not strong. It’s just not as weak as some other currencies of economies that are also in serious trouble. The currency fun and profits are about to begin.
Now where will this lead us?
As a currency goes down, commodities rise. Most of them are expressed in dollars.
We read an article about a problem the Super Bowl Sunday event has provoked: a shortage of chicken wings doubled the prices in some areas.
In the sixties the Anchor Bar of Buffalo, NY, started to use the wasted wing parts. Now there are plenty of breasts and legs, but there is a shortage of wings.
We all know that a chicken is nothing more than packed corn.
Will a weakening dollar and a stronger demand reignite the corn price again?
And what will happen if the oil price will pick up again?
You never know….
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Because the currency, this commodity is denominated, is the pound sterling.
And the sterling is making lows not seen for many, many years versus major currencies. The central banks around the world have had a contest to see which could cut rates to zero the fastest (Japan doesn’t count; it has been a mess for over a decade). The goal in times of global slowdown is to devalue your currency to aid exports and jump-start the economy with cheaper relative prices and more money to spend in the system.
The dollar is not strong. It’s just not as weak as some other currencies of economies that are also in serious trouble. The currency fun and profits are about to begin.
Now where will this lead us?
As a currency goes down, commodities rise. Most of them are expressed in dollars.
We read an article about a problem the Super Bowl Sunday event has provoked: a shortage of chicken wings doubled the prices in some areas.
In the sixties the Anchor Bar of Buffalo, NY, started to use the wasted wing parts. Now there are plenty of breasts and legs, but there is a shortage of wings.
We all know that a chicken is nothing more than packed corn.
Will a weakening dollar and a stronger demand reignite the corn price again?
And what will happen if the oil price will pick up again?
You never know….
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