The news out of the U.K. isn't good. From the BBC:
U.K. inflation jumped in December with the Consumer Prices Index (CPI) rising to 3.7%, up from 3.3% in November.
Retail Prices Index (RPI) inflation -- which includes mortgage interest payments -- rose to 4.8% from 4.7%.
So what happens when you can buy a short-term government bond over in the U.K. at a materially higher yield than one here in the U.S.? Why, capital flies over there, right?
And what happens when capital leaves? So do jobs, industry, and national vitality.
Bernanke is cornered. I know, I know, we have massive commodity price increases. But watch what happens when the insane liquidity games are forced out by the market.
We've been real good at exploiting our reserve currency status, and with that has come a paradox: We don't get the monetary inflation from these liquidity games, but everyone else does.
But what comes next is what always comes next when you push the pendulum too far: It swings the other way, and we will not avoid the impact from that.
The pincers are closing, and it looks like I might have missed on my $100 oil call -- if only because the peak came sooner than I thought, and the ability to sustain this game was short of my expectations.