Commodities: the end of the bubble?

It would be a good exercise to run an Engel's test on the commodities futures and dollar time series. As, at this time of writing, I am not equipped for that, I have tried to make a quick extrapolation from the chart.


The correlation between the 2 series seems to have improved since the end of the nineties and reflects the slow but sure loss of the leading role of the dollar as a reserve currency. The result of this is that any move of the dollar is today immediately reflected in commodities prices.
This has a major impact on the efficacy of interest rates cuts in the USA: growth will be slowed by higher commodities prices.
The USA are cornered.
Unless central banks decide to intervene on the dollar front....
Until then, get ready for a nice Russian mountain ride on the equities market.

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