| From Seekingalpha.com: Diversified commodities have suffered approximately the same peak-to-trough percentage decline as equities, illustrating the point that commodities are not a valuable hedge to a stock portfolio in a deflation scare and a liquidity crisis.
However, just as it is not the time to abandon stocks, this is not the time to abandon commodity positions in the context of a diversified multi-asset portfolio. Those who are predicting an extended deflation (which would obviously be a negative backdrop for commodities, as well as equities) should re-read Fed Chairman Bernanke’s 2002 speech on the subject of preventing a Japanese style deflation in the U.S....... Full Article: Source
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