Comments on: Commodity Inflation Causes Consumers to Cut Back on Spending

Comments on: Commodity Inflation Causes Consumers to Cut Back on Spending http://www.dailyreckoning.com.au/commodity-inflation/2008/07/01/ An independent perspective on the Australian and global investment markets Sat, 21 Nov 2009 17:27:32 -0600 http://wordpress.org/?v=2.8 hourly 1 By: TaxHaven http://www.dailyreckoning.com.au/commodity-inflation/2008/07/01/comment-page-1/#comment-28799 TaxHaven Wed, 02 Jul 2008 01:09:33 +0000 http://www.dailyreckoning.com.au/?p=2890#comment-28799 But gold is not just a commodity: gold is set to soar. I've had that feeling more and more since the middle of May: there's been a fragility, a brittleness about trading banter and trading activity recently. Nervousness, worry... Doubts about heretofore presumed easy retirements and the mutual funds supporting same. Stocks and bonds have bounced around in price erratically while on an ever-earthward trajectory. Yet, apart from what appear to be orchestrated takedowns, gold has behaved in a remarkably stable way. I'm not quite convinced that commodities WILL drop much. The world is more than just the US consumer now and "demand destruction" will be limited in nature. Additionally, the fact remains that this commodity "bull run" - which it really isn't - is NOT being driven by speculation, no matter what our governments spout. It is being propelled by scarcity of supply and by increased demand. Don't look for much more than a very temporary ten or 20% fall in the price of oil or crucial foodstuffs. But gold is not just a commodity: gold is set to soar. I've had that feeling more and more since the middle of May: there's been a fragility, a brittleness about trading banter and trading activity recently. Nervousness, worry... Doubts about heretofore presumed easy retirements and the mutual funds supporting same. Stocks and bonds have bounced around in price erratically while on an ever-earthward trajectory. Yet, apart from what appear to be orchestrated takedowns, gold has behaved in a remarkably stable way.

I'm not quite convinced that commodities WILL drop much. The world is more than just the US consumer now and "demand destruction" will be limited in nature. Additionally, the fact remains that this commodity "bull run" - which it really isn't - is NOT being driven by speculation, no matter what our governments spout. It is being propelled by scarcity of supply and by increased demand. Don't look for much more than a very temporary ten or 20% fall in the price of oil or crucial foodstuffs.

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