This past week (the last full week in June 2008) the stock market was described as having its worst June since 1930. The week before, London Telegraph reported that the Royal Bank of Scotland “advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks. … ‘A very nasty period is soon to be upon us - be prepared,’ said Bob Janjuah, the bank's credit strategist.”
The RBS statement was only one of the latest pronouncements from a cacophony of doomsayers. That is not to say that these people don’t have anything useful to say. They are sounding an alarm that at a minimum should make you curious about something that could affect you personally. And you owe it to yourself to try to understand what is going on.
In the posts that follow, I will attempt to educate you in the history, the philosophy and the economic developments that brought us to the point where responsible institutions have become so strident in their warnings. Meanwhile, consider these facts about commodity price increases in the past year, compliments of Jim Sinclair:
- Crude oil up 42.5%
- Ethanol up 20.7%
- Heating oil up 43.9%
- Natural gas up 76.5%
- Unleaded gas up 39.5%
- Cattle up 1.0%
- Corn up 58.8%
- Soy beans up; 26.4%
- Coffee up 5.9%
- Aluminum up 32.7%
- Copper up 25.7%
- Platinum up 33.4%
- Gold up 6.0%
- Silver up 13.4%.
