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The list of potential positive signs seems to keep growing.  Copper prices, a good leading indicator, have fallen 70% in the last year and appear to be making a similar pattern to the Baltic Dry Index and Chinese stock markets.

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I have been a deflationist for well over a year, but there are signs in the global economy that the majority of the price destruction due to the decline in the money supply has already occurred.  Bonds have turned down and gold has gained ground.  Is there a whiff of inflation in the air?    My thesis for a second half rally is still in tact.  If we begin to gain some traction here 2009 might not turn out to be such a bad year after all.