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Notes to myself, possibly of interest to others.
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Thursday, January 28, 2010

Rosenberg Daily - SOU: More Exports (-> Lower $ -> Higher Commodities)

We found this to be the most interesting statement in the State of the Union Address — something you can actually trade around:
“... we need to export more of our goods. ...So tonight, we set a new goal. We will double our exports over the next five years...”

There are different ways you can stimulate exports...They can do it through tax breaks or subsidies for selected industries...They can try and break down global trade barriers...They can do it by creating a climate that generates enhanced productivity...

Something tells us that this goal of doubling exports in a five-year span is going to include a further depreciation of the U.S. dollar as that will basically allow U.S. producers to de facto cut their prices in the global marketplace and as a result lift their market share.

After all, doubling exports over five years basically implies that they will grow at more than triple the pace of global economic growth....All of a sudden, we feel much better, current corrective phase notwithstanding, in our long-standing bullish call on commodities in general, and in precious metals in particular.

---Rosenberg, 1/28

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