Vexed - economic brains please help - Aussie Stock Forums

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  1. #1

    Default Vexed - economic brains please help

    this topic may have been covered already but im just a little confused.

    iron ore prices are going skyward. so is coal. steelmakers will pay heaps more. will this cost be passed on to the consumer, or are the steelmakers making squillions and can absorb the extra cost?

    food prices are going up. oil 100 bucks a barrel. gold heading to who knows where. silver, platinum, fertiliser. everything is rapidly rising in price.
    yet many people are struggling to pay the bills.

    america is broke. the money making machines are going flat out. the us dollar is cactus. imports more exy, but their big exports become cheaper to those who can afford them anyway. chindia etc are getting the gucci weapons and civilian technology.

    where is the release valve? surely this is unsustainable. something has to give, so what is it? massive inflation? hyperinflation? if so the costs of living are exacerbated. inflation will help the us govt as they are mired in obscene debt. is the inflation created on purpose? (was the sub prime fiasco an orchestrated event)

    is this all regulated through currency? will the rupee and yuan strenghen against all western currencies? will the sheer numbers of consumers in chindia act as a balance? new markets replacing old?

    so many questions. the crux is: commodity prices going beserk. is this sustainable, and if not, what breaks?

  2. #2

    Default Re: vexed. economic brains please help.

    just read an article in todays 'australian' covering a few of my questions.
    still vexed though.

  3. #3

    Default Re: Vexed - economic brains please help

    I think the answer to most of your questions is inflation.
    It's both cause and effect now, as the vexed environment will keep it in play until the US, in particular, capitulates.
    Until that capitulation, commodity prices will keep rising as they are "priced" in US dollars: Effectively meaning that to you and I the AUD price of metals is little changed.

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