"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 - Usin Your Implements: Bucket Loader - by Curtis Von Fange. Introduction: Dad was raised during the depression years of the thirties. As a kid he worked part time on a farm in Kansas doing many of the manual chores. Some of the more successful farmers of that day had a new time saving device called a tractor. It increased the farm productivity and, in general, made life easier because more work could be done with this 'mechanical beast'. My dad dreamed that some day he would have his own tractor with every implement he could get. When he rea
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