US Economic Trend Analysis Message Board

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Strategies & Market Trends : US Economic Trend Analysis

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To: normxxx who wrote (60)	6/9/2008 12:22:05 PM
From: gpowell	of 97

Speculation is part of world wide demand - and, as I mentioned just a few posts ago, the falling dollar amplifies the rise in goods prices. The latter is part of a process that deserves some elaboration. Nevertheless, neither is the result of FED pumping and if you think it is - you should provide some evidence. Providing some data or theory would be in the spirit of this thread. That you think individuals will dump both gold (a commodity) and dollars (a fiat currency) because they want "out of money" is nonsensical. These domestic price increases may indicate the shift in productivity between the US and rest of the world - which has been masked by foreign demand to hold dollars - is finally being realized. If you are an owner of resources, goods and/or services, you should do well, perhaps very well. If you are a consumer you will find you are a little poorer. For those who have read this thread think "Baumol's cost disease" with the US playing the part of the lower productivity industry. Note that the above is occurring with the rise in oil prices, not because of it. And, of course, rising oil prices have added their own spike in prices throughout a range of products.

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