austrian63

Rising Rates, Oil Prices Could Trample Green Shoots

Oil will most likely pass the $100/bbl point before year-end. Mad-Hedge Fund Traised good points above re: the world getting smaller. It will take time for economies to adjust. In the interim, expect much higher prices for food, clothing, raw materials, along with energy and interest rates (cost of money). In essence, the scarcity of resources will become apparent except for labor.

Much higher production costs and currency devaluation will depress the dmand for labor in the U.S. There can be no gain without pain. We cannot have booms that seriously misallocate resources fueled by massive money supply growth without the pain of re-adjustment. The more our government does to prevent the short-term pain of recession the more likely we will have long-term pain. This will become more apparent as energy prices begin spiking again late this year and in 2010.