Quote Originally Posted by TMoney View Post
PSP - I completely agree with everything that you said as far as being problems in our country. However, I do not see ballooning deficits as a catalyst for falling prices. If anything, the opposite Should be true. As the deficit grows, the dollar weakens making commodities more expensive as denominated in USD. The weird thing is that the dollar is actually appreciating. This is why scrap prices are down. A strong dollar means lower commodity prices. Take a look at the 6 month chart for the dollar. Notice the spike in May right before prices started falling.
The reason the dollar is appreciating has less to do with any inherent strength in the dollar than it has to do with the relative weakness of other currencies (particularly the euro) right now. All currencies are weaker now than they were 20 years ago, it is just that ours is still stronger than the rest.