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Playing Another Hand of Existential Poker

"Do the times make the man - or does the man make the times?"

1980-1983 SPX versus 2008-2013 Shanghai
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Yen GDX Chart from weekly data
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USDX 1994 versus USDX 2013 (weekly)
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If we're reading the rules correctly, at this point in this existential zero sum game of disinflation, deflation and reflation - both Xi's manifesto and Bernanke and Yellen's taper talk - trump Shinzo's Abenomics.

For those not following at home:

  • The dollar has historically declined when the Fed moves to constrict extraordinary monetary policies.

  • Japan has tangentially expedited disinflationary trends overseas in the past year through a weakened yen. We expect that trend to reverse.

  • China is breaking out of its long-term consolidating range. World-wide growth should accelerate, as well as broader reflationary trends.

  • Commodities, commodity currencies and emerging markets should benefit disproportionately from China's reemergence.

Generally speaking, while we recognize the significance of having a commanding face to the story, we're more in the, "Times make the man" camp. With that said, we're happy to report our better halves will soon be represented at the monetary pulpit, but will also likely receive both unwarranted praise and criticism.

Hopefully for Dr. Yellen she receives the Volcker treatment.

2008-2009 Shanghai versus 2008-2013 Shanghai (Daily)
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2009 Emerging Market Equities (EEM) versus 2013 Gold (GLD) - Daily
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2009 Gold (GLD) versus 2013 Emerging Market Equitites (EEM) - Daily
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2009 TIP versus 2013 TIP - Daily
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2009 EEM:TIP versus 2013 GLD:TIP - Daily
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Australian Dollar 2008-2009 versus 2013-2014 - Daily
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2009 Silver versus 2013 Australian Dollar - Daily
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2009 Australian Dollar versus 2013 Silver (SLV) - Daily
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