Inflationist or deflationist?

[errolanderson]

You can thank Iran for $100 per barrel
oil. There is about a $20 per barrel
geopolitical war tension premium built
into crude right now.

Also, if crude goes to $130 per barrel
like Goldman Sachs is preaching, can you
imagine the global recession /
depression it will create. Simply the
world cannot tolerate higher oil prices
without risk of more risk if financial
collapse.

Errol

[rhoff]

Europe is in a recession. North America is hardly
growing with 8.5% unemployment in the US and
China is slowing. My point is that despite all this
commodities remain relatively strong.you argue
we can't sustain $130 oil in an environment
where the US economy can hardly grow at 2%.
imagine if it were back to 3.5% then what?
remember there is a lot more paper flowing
around now than the last time we were at a
normal growth rate.

[checking]

Both sides are wrong on alternate days.

All that is happening are larger daily swings. Swings too high the message is "found an extra million ounces, lbs, kilos, tons, barrels, whatever is appropriate for the commodity. Swings too low the message is "weather related, natural disaster, political strife".

Nothing has change so long as you are getting your share of the injection of the new print. Sweat the details if you're not as you should be looking for a new occupation..

[rhoff]

Sure on a daily basis you can see the markets
move from risk off to risk on. Listen to newmonts
conference call and you will realize it costs a lot
more to find new gold than it used to. Same with
oil -70$ a barrel would make oilsand producers
pretty slow. Imagine if there was a massive out
flow from commodities ask yourself where that
money would go. I can't imagine people would
get to excited getting 50 basis points on ten year
treasuries.