Monday, August 21, 2006

I have a strange feeling that commodities are weakening and there could be a significant decline. I have several reasons why

1. Weakening housing prices could be causing demand to contract

2. Consumers are not accepting higher prices for finished goods.

3. Its been four freaking years for a significant decline!


Bernake could be right about deflation, but credit hasnt contracted significantly. The fly in the ointment is the dollar. What does the dollar due in the face of a rapidly weakening economy? Cutting rates is much more difficult than wallstreet wants to admit.

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