Commodities Essential - August 16, 2011

“Let the US win the currency war.” Plus: what might it mean for the energy space …  

Letting the US win means accepting global rebalancing. But the short-term consequences of a weaker dollar may make that rebalancing process more difficult for those other nations to bear.

The Fed would and should be praised if they can somehow navigate a global rebalancing without a severely painful adjustment on either side of the balance. I am not so confident. But I do entertain the fact that the pace of US economic rebalancing will quicken. And with Europe mired in financial and political turmoil, plus the potential for a painful adjustment in China and similarly-geared economies, it is not pie-in-the-sky to think that the US comes out ahead.

For this reason, let’s entertain an investment idea that may offer a nice way to position for a rebalancing American economy: the energy sector. 

Commodities Essential. 16 August 2011 

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