“Did the Chinese outwit the global actors in a quest to protect their paper assets? The answer may cause a shift in our views about the present rise in commodity prices. There was a Reuters article on Friday titled, “U.S. Tariff Review Considers Commodity Shortage, Inflation–Official.” This discussion is laughable for the U.S. imports almost zero commodities from China so why would that be the area of concern?

The strengthening YUAN would be a far better barometer of Chinese impact on global raw material prices. There’s lots to think about but watch the long-end of the yield curve to discern market action. If the FED chooses like Bartleby the Scrivner not to play then how STEEP can the yield curve go. When Paul Volcker was FED chair he INVERTED the yield curve to more than 600 basis points in an effort to crush inflation. How steep will the FED allow the CURVE to rise in an effort to hit its inflation target?”

Link Here to the Blog Post

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