Commodities Essential - August 9, 2011

It all comes down to confidence in policymakers. It appears to be waning. 

There have been plenty of times over the last few years where I have been waiting for a collapse of this nature - not wanting it (I promise!), just expecting it could happen. And here we sit, with seemingly all the global pots boiling over simultaneously. On paper, a double dip recession appears imminent. The only difference between now and the last dip: this time it has not snuck up on us through some cryptic derivatives implosion.

And not only are investors better-versed and better-ready to react to a market shock (this is not to say the majority is sufficiently ready), policy makers are not shy about enacting bailouts, creating backstops, and pumping cash to wherever it is needed. And that, dear readers, is why today’s FOMC policy meeting and announcement will be watched perhaps more closely than President Obama at an NRA meeting. 

But even if the FOMC indicates QE3 (or some form of liquidity support) is locked and loaded, will it be enough to reignite the market’s uptrend? It’s not looking good …  

Commodities Essential. 9 August 2011  

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