A commodity bubble in the making equals inflation speeding up

April 3, 2010 at 12:31 pm Leave a comment

Iron ore pricing system is now changed to quaterly pricing based on spot price. Mining companies are going on an acquisition binge,latest is Peabody and NewCrest. Agricultural products companies are not far off the track either, with fertiliser,sugar companies acquisition. Worse of all, crude oil is rising again, yet OPEC is still sticking to its quota.

With the central bankers turning on the tap of cheap money and volatile weather conditions, expect inflation to speed up as the commodity bubble gets blown up.

Entry filed under: Watch your step. Tags: .

If the incentive is wrong, the behaviour is likely to be wrong too Escape velocity for US economy vs Gravitational pull for US unemployment

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