I’m no economic prophet, but I thought I’d throw in my two cents for what the future will hold.
Times are tough. The economy is looking weak. The stock market is struggling. Housing is in a slump. There’s a weak dollar, and a correspondingly weak bond market. Commodity prices are soaring.
There’s reason for optimism. Here’s what I think will happen within the next few (say, roughly five) years: Housing and the stock market will start to recover, leading to investors pulling their money out of commodity markets and back into real estate and stocks. The result: falling commodity prices, and healthier real estate and stock markets. This could start to happen once the election year uncertainty comes to an end, but may take a few months or years to really come to fruition.
I see the rising commodity prices as related to an unsustainable bubble; that which comes up will come back down.
The funny thing is that we didn’t hear this grumbling when housing prices were rising. (One reason is that people could take out home equity loans, or spend their money with more abandon, thinking they had gotten that much richer just by living in a house.) But now that commodity prices are rising…