Investors gird for post-recession inflationThese are strange times. The experts are worried about deflation and inflation at the same time. What's someone not in the know supposed to do?
By Patrice Hill, Washington Times
Brushing aside statistics that show an annual inflation rate of less than zero, investors already are selling off dollars and driving up the price of gold in anticipation of a surge in prices as soon as the economy recovers from its deep recession.
Many economists think deflation is still a greater worry, but the fear of inflation has prompted a reprise of last year's speculative interest in oil and other commodities, which this decade have proved to be good hedges against inflation. That, in turn, can be a self-fulfilling strategy, as pouring money into commodities drives up prices.
Energy prices rose sharply this spring and summer, driven by the revived speculative interest and expectations of a global recovery, but recently have leveled off to about $70 a barrel. [link]