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| Probably not, never said it was. I said if oil starts moving we better hope grains do as well because inputs will. Oil moving higher is almost never good, especially since that is a mature volume business and does act like a direct tax on consumers with little growth reinvestment.
I do think that stability in the price of oil is a combo of steady demand and the dollar, and world demand will pick up again and sooner than later IMO.
Now for the real kicker, and I have been kicking this idea around for awhile, and finally heard a similar comment today. Because of food inflation, ie demand outpacing supply, in China and dollar weakness here. It is now cheaper for China to buy certain raw food commodities "here" than from their own domestic source (apples were the example, cheaper to buy from Washington than domestic).
Why is this important? How much higher is the ceiling on grains now compared to a few years ago, demand is a much bigger beast and the extreme imbalances in currency. I am not saying this is sustainable, but in the near to medium term this thing could get crazy. Gotta get in on the good so you can survive the bad.
As all this relates to the economy, I still think we are slowly crawling out of the basement. Oil could be the monkey wrench. I still think higher grain commodities do not effect consumers too much, however oil could.
No matter, I agree that we will not see any major "feel good" recovery numbers until 2012. The Fed and Wall Street are just trying to paint a rosy enough picture to limp us there. IMO Wall Street, right or wrong, disconnected or not, crooked or not, is the glue holding things together right now and the Fed sees this, and hopes it starts shaking dollars loose. | |
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Hey Mizzou Tiger
