The Primary Inflation
Relative performance line between the Commodity Index (CRB) and Global Bonds can indicate whether the time ahead is inflationary or not. The primary case (Fig 1.) illustrates that Bonds have outperformed CRB and are now at historical extreme of more than a decade. There has been a relentless rise in global bonds, but that has not been the case with commodities, which have slowed down and stagnated a bit compared to the controlled interest rate situation.
So where does this leave us? Extremes are unsustainable, especially when they become of a multiyear nature.
This article is written for ATMA
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