How long can commodities go up?

"War is a continuation of politics, and politics is the concentrated expression of the economy. ”

If the price is denominated in US dollars, then the price of commodities in the world is not low.

Take copper, for example:

The lowest point of the price of COMEX copper was 1.93 in 2015, and it also fell to this level in 2020.

But after 2021, inflation is high and the pressure on the dollar increases.

The U.S. believes that if commodity prices are allowed to rise, the Fed's stimulus policy for the economy will be stolen by resource countries.

So we started to control inflation, to suppress commodity prices,

Start raising interest rates.

After the interest rate hike, copper prices will be halved after 2022, and crude oil prices will be halved.

Then in 2022, the Russia-Ukraine conflict broke out, and Russia's energy pipeline to Europe was blown up.

That's why I pointed out in my article last night: the outbreak of the Russia-Ukraine conflict is a war for resources, because of the over-issuance of the dollar, but the price of commodities is not allowed.

Russia is not wronged, and it will not allow the waste paper printed by the Federal Reserve to be exchanged for real food and oil.

Now that resource countries have begun to take the lead in rejecting the dollar and settling crude oil with gold, then the value of gold and the value of other commodities will be resettled with gold as an anchor.

If so, what is the value of commodities settled in gold relative to credit currencies?

This is an all-time low, and it can be said that commodity prices have barely risen since the Bretton Woods system in 1971.

Even if the currency is overissued, wars have broken out in resource countries that want to increase prices or break away from the dollar.

The First Oil Crisis (1973-1975):

This oil crisis was closely linked to the Fourth Middle East War of 1973, also known as the Yom Kippur War or October War. The war broke out between Israel, Syria and Egypt, mainly as a result of attempts by Arab countries to regain territory lost in the Third Middle East War in 1967. After the outbreak of the war, some member countries of the Organization of Arab Petroleum Exporting Countries (OPEC), in order to counter the countries that support Israel, especially the United States, decided to impose an oil embargo on these countries and raise the price of oil. This has led to oil shortages and soaring prices around the world, which in turn has triggered economic crises and political turmoil on a global scale.

Second Oil Crisis (1979-1980):

The immediate trigger for the crisis was the Islamic Revolution in Iran in 1979, which overthrew the pro-Western Pahlavi dynasty and established the Islamic Republic. During the revolution, Iran's oil production was severely affected, resulting in a decrease in global oil supply. In addition, the 1980 war between Iraq and Iran (Iran-Iraq war) further exacerbated tensions over oil supplies. The war led to a sharp drop in oil production, and international oil prices rose sharply again, triggering a global recession.

The end and victory of the two oil crises directly laid the foundation for the dollar to anchor oil, and since then no country in the world has dared to blatantly say, "The dollar is seriously overissued, let's use gold to denominate oil"

Until this time, the conflict between Israel, Ukraine broke out.

So the war in the Middle East and Russia actually determines the strength of the commodity rebound this time.

If Iran and Russia can get the U.S. to compromise, the strength of the commodity rebound will be unprecedented.