Raoul Pal @RaoulGMI Founder/CEO - Global Macro Investor and Real Vision Group, Business Cycle Economist, Investment Strategist, Economic Historian, Traveller and Rum Drinker.. Aug. 05, 2019 1 min read

When I look at the long-term chart of the CRB Commodity Index, it really does have deflationary bust written all over it. We are around the key support (like so many other things - many of which have started breaking)...

I know many of you like to see these HUGE charts in log scales, so here it is... it looks even worse... commodity prices can more than halve from here.

It's probably all down to this chart of the ADXY (Asian currency index) which has Asian currency crisis (dollar spike) written all over it and is the probably source of the deflation. It has broken down.

I can not stress how important this all is. Dollar strength is first going to kill EM but in the end it's going to kill the US. This is going to play out in its entirety over the coming 24 months, probably.


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