Federal Reserve officials today tell us that there is far less of a link between commodities and inflation.
While the dollar realistically moved into inflationary territory by 2004 and grew weaker through last summer, its strength in the fall vs. undefined foreign currencies and commodities gave inflation hawks hope that mistaken policies from earlier in the decade were finally being reversed.
The remainder of savings can be distributed among stocks or equity mutual funds, real estate (most often via real estate investment trusts) and perhaps a smattering of commodities as an inflation hedge.
While price pressures have eased for most commodities, food inflation is still accelerating at a worrying pace due to inefficient storage and distribution facilities for farm produce, which lead to regular supply shortages.
Since the recent fall in headline inflation is largely due to lower prices of tradables, including commodities, with service inflation still running around 8.2 percent year over year in July.
As well as taxing consumers, or worse, dearer commodities push up overall inflation, as the latest numbers from the euro area and Britain show.
Overall, if central banks started shorting dollars, commodities would rise, inflation would rise, and this would be bad news for the drivers of the world economy.
The best assets to own in order to obtain a positive return after adjusting for inflation are commodities and commodity-producing stocks, especially those that do not keep their retained earnings in US dollars.
Commodities like beef are sending inflation higher than the Central Bankers (BCB) would like in Brazil.
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Inflation always sends commodities rocketing upward, and this time has been no exception.
In the late 1960s we began printing too many greenbacks, which resulted in inflation, sending commodities, including oil, upward.
Monetary policy would then be guided by the market prices of a basket of inflation sensitive precious commodities such as gold.
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The Federal Reserve's reckless, loose-money policy in 2004 and again in the summer of 2007 led to a catastrophic inflation in the commodities and housing markets.
Some comfort can be taken from the fact that, although some commodity prices are above 2008 levels, inflation rates of commodities are still below what they were then.
The main sources of inflation in China are commodities, mainly oil, iron ore and agricultural commodities.
Over the last year, inflation has already hit commodities hard, with food prices eclipsing record highs.
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That commodities have historically served as leading inflation indicators is no accident.
It is about the impact of QE on commodities and the food and energy inflation that it may have inadvertently, or perhaps purposefully, engendered.
In addition, make sure that you have enough growth in your portfolio from equities, real estate, and commodities to keep pace with rising inflation rates.
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That is because commodities are generally perceived as an inflation hedge.
Americans aren't feeling higher prices in the form of inflation yet (raw commodities are a small proportion of final food and product costs), but shipping methods are changing.
The groups have warned that the strike may worsen India's price pressures by disrupting the supply of essential commodities and lead to further acceleration in inflation.
Hundred-dollar oil prices, creeping inflation in food and other commodities, gold behaving the way it did in 1979--could we be in for a repeat of stagflation?
This time it is the inflation bubble, particularly in commodities.
Continuing concerns about the prospects of inflation have many investors and advisors looking toward deploying inflation hedges like gold, commodities, TIPs and, despite the recent collapse, even real estate in their allocation models.
One way to protect yourself from that is to further diversify a part of your portfolio into foreign stocks and bonds and perhaps alternative investments like real estate and commodities that tend to do well in inflation.
If that were to happen, demand for dollars would sink, and because there is no other currency to take its place in terms of trade, global inflation would rise as important commodities like agricultural goods, oil and precious metals metals would rise substantially to compensate.
As commodities suffer a pretty substantial correction, the inflation debate has moved into new territory.
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After a burst of price gains in the 1970s, as inflation spun out of control, commodities turned cold.
"The commodities and crude oil prices are pushing the inflation figures up, " said Credit Suisse chief economist Hiromichi Shirakawa.
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