Commodities Signal Global Recession

Featuring John Butler

John Butler continues the Commodities series as he addresses the across-the-board global declines in commodities prices, explaining why it is a demand-driven phenomenon and warning of the potential exposure of U.S. markets to the backlash of defaults caused by the knock-on effects of a strengthening dollar.

Published on
9 September, 2015
Topic
Recession, Structural flows, Global Outlook
Duration
15 minutes
Asset class
Commodities
Rating
23

Comments

  • TB

    Thibault B.

    25 9 2015 06:52

    0       0

    great thoughts, but a short end treasury selloff would be equivalent to a rate hike - how would it coincide with a weaker dollar?

  • JB

    John B.

    14 9 2015 15:28

    1       0

    Dear All: I indeed believe that gold will be a major beneficiary of what will unfold as the escalating EM BoP crises migrate to the heart of the global financial system. See the report linked below.

  • ii

    ida i.

    13 9 2015 14:10

    0       0

    ... central banks intervene with helicopter money QE to push the dollar down and commodities up, the emerging markets will breathe. they have big dollar debts. But you need a new type of QE I believe

  • ii

    ida i.

    13 9 2015 14:08

    0       0

    I don't believe the situation is the same as 1997. There has been eccessive investment in local currency emerging market bonds thanks to QE, If QE reverses it pushes dollar up and kills EM. If the

  • DF

    Dominic F.

    13 9 2015 11:36

    2       0

    As we have heard from many of the interviews on here, 'Everyone is right, it just depends when'. USD goes up, then goes down = Everyone is right.

  • AE

    Alex E.

    13 9 2015 05:53

    2       0

    I think Raoul & John r both right. Raoul being right on $ going higher which causes Asian countries to default, then John being right on dollar, bonds & equities crashing with everyone going 2 Au! GL!

  • AZ

    Abbas Z.

    12 9 2015 16:16

    1       0

    I think the view of Sugar is quite interesting. In particular if you look at Sugar in BRL terms.

  • pm

    preston m.

    12 9 2015 00:10

    3       0

    I think we're at a point where everything is dangerous.

  • DP

    David P.

    11 9 2015 23:53

    4       0

    John, your broad theses of a weaker dollar, developing stagflation, and fixed-income/equity market declines would seem to suggest higher precious metals prices as well, would they not?

  • WM

    William M.

    11 9 2015 19:26

    3       0

    Excellent and thoughtful commentary. RV is here to bring different opinions from smart people in the financial sector. I appreciate these diverse views, however most are not predicting a nice future

  • BM

    B. M.

    11 9 2015 13:47

    2       0

    Thanks for the link to the Amphora Alpha report. Very engaging. You've got a new twitter follower.

  • GM

    Gerald M.

    10 9 2015 22:57

    6       0

    Raoul is right or John is right - or they are both wrong and the $ muddles through. I appreciate the differing opinions. It just goes to show that no one really knows. Roll the dice and Good Luck!

  • je

    james e.

    10 9 2015 22:33

    5       0

    Based on John's talk and the below comments: long liquor.

  • CH

    Colin H.

    10 9 2015 14:28

    2       0

    Very interesting idea regarding long treasuries. Was long $TLT from 21-Jul but I closed bc action wasn't right.
    Will go long again if I see an opportunity but it behaves differently from last year.

  • TJ

    Terry J.

    10 9 2015 09:14

    4       0

    Concise and brilliant. John is simply top drawer.

  • JB

    John B.

    10 9 2015 08:14

    6       0

    Thanks for the thoughtful comments. I elaborate on some of these points in this report from earlier this year: http://amphora-alpha.com/wp-content/files_mf/1420569804AR_0115.pdf

  • AR

    Adam R.

    10 9 2015 03:46

    9       0

    I think it's fine to have a short $ view but he doesn't explain what (in the case of a recession) the $ would decline against. I personally can't see people piling into the ¥,€,£ perhaps Gold maybe?

  • CH

    Calvin H.

    10 9 2015 02:03

    6       0

    Well he certainly put his cards on the table...after I've been
    'prepping' several times for the big one, 'this time it's different'?!....I'll have what the lady is drinking and make mine a double pls

  • CP

    CRAIG P.

    10 9 2015 00:34

    10       0

    Definitely a contrast with Raoul's go long the dollar first before anything else. Also, it would have been nice for suggestions on what to be IN in this potential environment.

  • MA

    Melanie A.

    9 9 2015 23:46

    14       0

    Great presentation - really clear and insightful and agree (esp on treasuries) but gosh, pass me a scotch.

  • GT

    Graham T.

    9 9 2015 15:18

    17       0

    RV has presented us with both arguments for and against DXY and the US Yield Curve. No excuses now.