The Greenback and Materials

The UUP which is the etf that tracks the dollar, showed a clear break at $26 last week and I do believe it is going lower still. How could it not when we print and distribute obscene baskets of loot on a daily basis to broken companies that have zero shot of organic growth for decades to come? In any event, a further decline in the dollar should be good for commodities and materials, at least according to the playbook. However, this time could be different as the China economic growth explosion looks like it could become more of an implosion this time around. I’m very bearish on China. The commodity surge that started back in August 2007 was ignited to a significant degree by China and its growth prospects. That dynamic has now been muted if not removed by this deep global recession that we are now in. The text book says weak dollar, buy materials and commodities. I just ask who will be buying the actual commodity?

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