Roubini sees heavy deflationary forces through '12
At a conference, Roubini said that although easy monetary policies have fueled another asset bubble, the deflationary forces coming from industrial overcapacity, falling labor costs and a still damaged financial system will prevail over the next two years.
I have listened to the arguments of commodity bull Jim Rogers and the counterarguments of Nouriel Roubini. I find Roubini's arguments much more compelling. That's especially true after looking at long-term cement prices in my last post.
I did not believe in the global decoupling theories heading into the last commodity bust and I do not believe in them now. (As you may recall, I heckled Chinese investors heading into their Olympics.)
As such, I am changing my short-term inflation mood in the upper left hand corner of my blog to show my deflationary bias. That doesn't mean that I think oil can't make it to $100. Who knows? I don't think it will stay there if it does though, any more than it could stay at $140 the last time.
It eventually all comes down to supply and demand. We built a supply side based on never ending debt-based demand. Now we're watching it all fall apart.
As a side note, my girlfriend just bought a gallon of milk for 99 cents. How is that even possible?
Milk Prices Start to Rise
Dairy officials say this slight uptick in prices is not a long-term fix and they're still pushing for a change in the federal milk pricing system.
The Market Ticker - Video Fed Z1 Ticker: 3Q 2013 - For those of you who prefer my Fed Z1 summary in video format....
2 hours ago