For decades, wholesalers who wanted to buy raw materials such as cereals, metals or meats they just had to go to chicago market, Kansas City, New York or London and buy whatever they can carry.
Traditionally, you saw two types of buyers: the buyer who actually wanted to use the merchandise and the speculator who was betting that the price would rise. But you always saw both product and merchandise leaving the market door. However, this has ceased to be the case for several years to the point that practically the physical product has been discontinued.
For example, him COMEX has just over 2% of the physical gold required to cover all paper contracts that are traded daily.
Some consider that the lack of physical products is an effect caused by countries like China and India, which go directly to buy all their production from the mouths of the mines, which is why it is a gold that does not even reach the market. But this is just one example of what happens in so many raw materials.
Since the United States became the first world power around 1914, the dollar has been a part of everyday life around the world, but since Alan Greenspan began using the dollar printing press as a panacea to solve the problems of everything the world, which has remained a normalized practice, began to destroy it.
A destruction that will lead, without being aware of many investors, in the most important event of our lives after a global pandemic.
Evolution of the US dollar Eduardo Bolinches
The dollar began its downtrend more than two decades ago to lose almost 40% of its value in eight years. Then came an upward reaction in two well-differentiated impulses, where the 89-point level in the Dollar Index plays the leading role.
I’m convinced that The dollar will break that currently support level and will head towards its 2008 record lows sooner rather than later. This fact will make the price of raw materials continue to rise since they are denominated in dollars.
Evolution of the CRB Index Eduardo Bolinches
In fact, we can already clearly see in the graph above how the CRB Index has managed to break up the main downward trend that was in force since 2008, in addition to the important pivot level of 200 points.