Thursday
Sep142006
Do Gold And Oil Say That Inflation Is Over Now?
September 14, 2006 at 10:00 AM
So, the speculators run out of gold, oil and natural gas. Prices of all three are down significantly in the last weeks. I just heard Larry Kudlow on CNBC say that this means inflation is over. I'd like to propose the contrary argument. I think he is being America centric in his analysis of assets that are prices globally.
The following things have not changed yet:
1. India and China continue to have high economic growth rates. They continue to industrialize and will continue to increase their use of resources.
2. The price of gold is full of speculation is expected to have pullbacks.
3. The US Dollar recovering some value a bit has some to do with the dollar price of these commodities falling.
My prediction: Commodities will continue to fall as speculators using futures will continue to sell and maybe even go short. One day the media/market will wake up and realize that the emerging economy growth story is not over. I look forward to tomorrow's CPI report. We may see a decline due to energy for both August and September but global pressures on commodity prices continue.
Disclaimer: Nothing in this web log is meant to be a recommendation to buy or sell. I do not give investment advice. Do your own research. Do not rely on anything in this weblog to make investment decisions. I do not log all my trades here. I only describe or mention those that I think might be interesting. Consult your own investment professional before buying or selling any security.
The following things have not changed yet:
1. India and China continue to have high economic growth rates. They continue to industrialize and will continue to increase their use of resources.
2. The price of gold is full of speculation is expected to have pullbacks.
3. The US Dollar recovering some value a bit has some to do with the dollar price of these commodities falling.
My prediction: Commodities will continue to fall as speculators using futures will continue to sell and maybe even go short. One day the media/market will wake up and realize that the emerging economy growth story is not over. I look forward to tomorrow's CPI report. We may see a decline due to energy for both August and September but global pressures on commodity prices continue.
Disclaimer: Nothing in this web log is meant to be a recommendation to buy or sell. I do not give investment advice. Do your own research. Do not rely on anything in this weblog to make investment decisions. I do not log all my trades here. I only describe or mention those that I think might be interesting. Consult your own investment professional before buying or selling any security.
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