"Between fuel and food prices inflation is sure to follow. I'm not a nay sayer in that the sky is falling. Once inflation really takes hold the fed will have no choice but tighten the money supply. A strong dollar will sure kick the chair out from under the land bulls, lower energy prices, and as soon as crude gets back down under 50 dollars watch the corn market collapse since nobody will want any more ethanol than they have to have. That doesnt even address what will happen to our grain exports if the dollar gets stronger."
I agree totally. But I have a slightly differant take on it. The strong dollar is what has kept imports cheap and our exports expensive. After 27 years of this policy the country is in a world of hurt to the trade imbalance. The trade imbalance is what has built up pressure on the value of the dollar and other nations are finally starting to realize it.
Raising interest rates may defeat inflation at home but not be enough to induce foreign money to buy up US trade securities propping up the exchange rate of the dollar. The "subprime" mortgage screw up is financed by foreign investors - after losing their arses they may not be so willing to keep sending their money to the US even with higher interest rates.
As for grain prices, the world market determines the value as long as a strong dollar isn't forcing down US prices. I'd start paying more attention to world supplies and growing conditions in other countries.
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Today's Featured Article - Show Coverage: Journey to Ankeny - by Cindy Ladage. We left Illinois on the first day of July and headed north and west for Ankeny, Iowa. Minus two kids, we traveled light with only the youngest in tow. As long as a pool was at the end of our destination she was easy to please unlike the other two who have a multitude of requirements to travel with mom and dad. Amana Colonies served as a respite where we ate a family style lunch that sustained us with more food than could reasonably fit into our ample physiques. The show at Ankeny
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