Above is today’s front-page headline from the Financial Times. As readers will remember, I launched a series of major posts in the blog on 18 August, forecasting a collapse of oil prices to “$70/bbl, and probably lower“, and that the US$ would see ”a strong move upwards“. The headline confirms I was right.
The posts in the series were as follows:
August 18: The Great Unwinding of policymaker stimulus has begun
August 27: Oil prices break out of their triangle – downwards
September 3: US dollar rises as investors worry low-cost money may disappear
September 10: Great Unwinding of policymaker stimulus creates interest rate risk
September 17: Shiller warning suggests S&P 500 bubble coming to an end
In early November, I then highlighted the likely implications of these developments in a feature article for ICIS Chemical Business, which you can download here.
This Great Unwinding of policymaker stimulus is only just beginning. I fear it will be a long and bumpy road, as global markets gradually reconnect with the fundamentals of supply and demand.
The FT headline confirms that this process is now underway.