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Current Marketing Thoughts

RSS By: Kevin Van Trump, AgWeb.com

Kevin Van Trump has over 20 years of experience in the grain and livestock industry.

Funds back to Commodities: 3 Main Forces

Sep 12, 2013

Money-flow both in and out of commodities continues to be highly monitored. An interesting thought starting to circulate inside the trade is the fact we may be setting ourselves up for a NEW wave of money coming back into the commodity sector. Especially if traders get temporarily spooked out of equities. Below are three major forces that, if the winds blow in the right direction, could once again fuel the commodity fire:

  • China - Most all economic numbers and data are pointing to a much softer landing than most anticipated. In fact China looks poised to start growing once again. The question is, as they shift to more "consumer based spending" will they be able to push demand as hard as they once did? If they can get over the hump, China could once again be a major force. In fact, one of todays Bloomberg headlines read "Goldman Sees China’s Commodity Demand Rebounding to December." 
  • Japan - Abeonomics is in full-swing. Japan has very few options but to let their currency drift lower and lower in an effort to create inflation and spending. Keep in mind, for the past 20 years "deflation" has had a stranglehold on Japan. In an effort to change this it could spark a much greater demand for commodities.
  • Lame Duck President - As you can see, he is waiting on the rest of Washington to make the decision on Syria. Most political insiders believe we will see less and less decision making as his 8-year term pushes into its final leg. Often times this lack of global US leadership is characterized by a stagnate or disappointing US stock performance, improved growth in other parts of the world, and money flowing into commodities.   CLICK HERE to get all my insights on in my daily wire, the Van Trump report. 
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