mannan16 Jan 2016 14:23
u wd have thought so..
...s&p way too high (and usd, esp v euro)...china in tight spot (and has long history of social unrest when times are tough...hence rightful concerns of Party)...china devaluations may trigger currency wars and spectre of 30s in face of weakening global demand...euro strengthening increases deflationary pressure in eurozone
...with all this deflationary concern, why would commodities (and rio) not fall ...a lot...further?
...BUT
.the big concern in the background is high indebtedness and low yield...so, if the us/uk and other spaces like eurozone avoid the terrible outcome of deflation (when good quality bonds will clearly outperform), when will yields revert to normalcy..and the bond bubble burst?...if us bonds, usd collapse amid stagflation then it would feel reto ...like the 70s...when commodities outperformed...so building a position in rio to hedge against stagflation makes some sense imv