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As always, this month’s Absolute Return Letter from Niels Jensen is a must read:

“Many commentators, especially those punters eager to express extreme views of more or less dubious quality on the internet, have been only too willing to declare the recent increase in commodity prices a function of the ‘money printing’ policy applied by central banks in the western hemisphere following the credit crisis of 2008-09. The fact is that the Fed and other central banks can ’print’ trillions of dollars, euros or pounds without it having  any effect whatsoever on present or future inflation. What really matters is what the commercial banks, whose balance sheets are boosted by the QE, do with the money, and the overwhelming evidence is that overall lending activity has moderated quite dramatically since the credit crisis (see chart 2). Hence the notion that QE is to blame for the current spike in inflation is pure and simple nonsense.”

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