Tuesday, April 18, 2006
The Music Begins to Slow Down: Better Grab a Chair
It seems that oil prices have finally risen to the point where they are having effects on prices...yes, the dreaded "inflation" is now kicking in. Wholesale prices rose in March at an annualized rate of 6%. This is not the outcome desired by the economic tinkerers at the Federal Reserve, who will undoubtedly choose to continue raising interest rates. Those prepared souls who have defensively invested in commodities such as energy, metals, currencies, and inflation-protected bonds are well-positioned to thrive in these choppy waters, while those who think that the bankrupt Empire can continue to party indefinitely will begin to feel the pain as things start to unwind. Too young to remember the painful "stagflation" of the 70s? The beauty of the internet is that you can now read about it.