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Oil is deflationary. Soft commodities look like they are going to follow suit and the US farmer is sadly going to be driven into bankruptcy, just like the shale patch...

1/
Here is the monthly log chart of Corn. Horrific. It probably gets to $200.
And here are Soy Beans...$450?
And here is Sugar...$4?
And here is the CRB Raw Industrial Materials Index (not oil or gas). It looks like they will halve from here...
I just don't see how CPI or core CPI stays positive.

I think real rates will go up. That is the worst possible outcome.

Debt + Deflation = A Ticket to Bankruptcy.
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Raoul Pal
@RaoulGMI
The Dollar Wrecking Ball:

I hear the narratives that the Fed is printing money...Brrr... and that is going to cause a dollar collapse. I worry that this narrative is very wrong. My strongly held view is that the dollar is the pinnacle of all the macro issues we face. 1/
The Fed have undertaken unprecedented printing, as we know, and the balance sheet is growing exponentially.
But it is not that simple. We live in a relative world where the dollar standard is the very cause of many of the issues we now face. There are simply not enough dollars available in the world to service all the debts and thus a debt deflation remains the BIG RISK.
Read 28 tweets
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Raoul Pal
@RaoulGMI
I sense that everyone is bearish the dollar due to the Fed actions. As you know, I am firmly in the dollar bull camp.

This chart helps explain my view - the dollar is cyclical and as the ISM falls to 35 or lower, the dollar should rally hard (+18%) (Dollar inverted here)
Why do I think 35 for the ISM? It's basically what the weekly ECRI is telling us...
And that would suggest that the triangle pattern in the Euro could lead to a powerful down move...
Read 7 tweets
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Raoul Pal
@RaoulGMI
A bit of Sunday morning stuff...

The three things that profoundly changed my thinking or understanding of my world over the last 8 years:
1. Developing my Monsoon theory based around inverting the world of ageing demographics and high debts in developed markets to low debt, young demographics countries around the Indian Ocean, loosely inspired by the book Monsoon by Robert Kaplan

realvision.com/shows/horizon/…
2. Having Bitcoin and blockchain explained to me by Emil Woods and Chad Cascarilla in 2011. Then conversations with @novogratz @dan_pantera @DTAPCAP @barrysilbert @100trillionUSD @BrendanBlumer Charles Hoskins @TuurDemeester @MarkHar13514700 and Wences Casares. Most are on RV.
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