None of the exit programs that the government will try to implement will be very much efficient to recycling the bulk of money that now is in the system. The velocity of the demonetization by the FED will run at a very much lower speed than the massive monetization and inflation which certainly will occur when the economic recovery becomes more solid. In this context commodities talk, Funds, Banks and private specs will buy them at a faster pace.

However there are some points that could make this scenario not as simple and could cause seriously ups and downs for the commodities. The dollar probably will continue higher against its pairs because of the economic recovery, the ideas of lowering deficits for 2,011 and a more hawkish scenario for the dollar. The beginning of exiting on the quantitative easing programs should start this year and will play also an important role on the volatility besides with all the government propaganda which it means. However the net sum must be inflation and commodities at much higher than the current levels.

No other way I can foresee. The FED will act limited since it won’t apply any aggressive restrictive monetary policy to withdraw the billions of dollars issued. The risk is too high and could be catastrophic, as the total abortion of the current economic recovery with the possibility of a new and a worse financial crisis that could be on the table, but this time with massive defaults in the banking system.

Since the monetary policy will continue to be resilient to tight very much It could be foreseen a good recovery of the US economy (the conditions are ready)with combination of a higher dollar, higher interest rates but also higher prices of Gold, energies and most of the commodities that will try to catch up the running inflation.