Sunday, July 27, 2008

COMMODITIES AND MONEY part 1 C

What would have in your pocket Kudlow? Gold, diamonds or just plain money. That would be hard to explain. As we know, money is the instrument of exchange between a buyer and seller. Everything is priced in currency, not gold nuggets or diamond carats. But when commodity prices rise fast, then you start to have second thoughts on what to do. A period of low inflation has caused one of the biggest greed movement in the United States and the world. A period of high inflation is following this with dangerous riptides in real estate, banking, insurance and other parts of the economy. Oil prices surged on many causes. The weakening dollar due to the loss in confidence and rising debt in the US as well as low interest rates, speculation on the commodity markets because of various geopolitical events and increased demand for energy. It is up to the guys in Washington to take some serious action in preventing a domino effect.