The reason of agriculture products price will be down: The global economy will be cooled down as interest rate will be raised on 2nd Quarter of 2011. After China increase the reserve ratio to 20%, the money supply will be tightened. Private sector cannot borrow extra fund from banks, they cannot re-invest or increasing investment in the following time.
Euro may increase interest rate on 2nd Quarter of 2011. The purpose is to prevent inflation.
The main resistance is from USA. USA needs Quantitative Easing (QE) to increase money supply as a method to stimulate her economy. As the recent economic data, USA has reached her purpose. If USA would not follow the trend of other economic bodies, us dollar will be depreciated more. The price of 10 years treasure bonds will be declined seriously. The yield of 10 years bond will be raised. The scene of T-bonds declined must reduce the borrowing power of USA. So ........
As my essay on April 2011, the functions of QE 1 and 2 are stimulating the economy of US. After Federal Reserve implies no QE3, the economic data is not clear. Today is 2 June of 2011, the Dow Jones slumps 2.22%. What will be next.
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