2006 - One thing I noticed back in the 1970s - the Fed can create excess money, year after year after year, with very little immediate inflation - it just doesn't work work through the system that fast, except for some financial asset classes.
After 3-6 years, the inflation starts showing up all over, not just in energy prices or metals, and it won't go away for anything short of a sharp and deep recession, and will persist for several months even then, since it has become 'cost push' inflation, and businesses won't build NEW inventory with out a commitmnet to sell above the new higher costs.
So I will be looking for the inflation plays - metals, timber, grain, transport, some overseas real estate. I already have lots of energy stocks.
I expect China and India growth to persist, and keep pulling up prices for metals, some food stuffs, etc.
As a secondary play, I expect some capital equipment suppliers will do well - they have to making SPECIALIZED , not commodity equipment. Examples would be those Giant Mining Trucks (Terex), oil field equipment, chemical processing, etc. |
