Who will win the tussle?
Bear's arguments: CRE is getting worse. Continue tightening of consumer credit. Jobless number is still bad. Housing price is still dropping. Some major banks are insolvent.
Bull's arguments: Bad economic numbers are less bad. Governments around the world are pumping a massive amount of money.
I think that the key is the USD. The PRC could be buying up world commodities as a way to diversify from USD. We know that PRC is now the 5th largest gold holder in the world. They are also building up their emergency petroleum reserves. With so much money in their pocket, what will they be buying? Anyhow, I wonder what will happen when everyone starts to loose their confidence in the USD?