I have been saying that for some time now. I had not heard the actual amount of the Eurodollars (dollars residing outside the US). The thing of it is with commodities, they don't even have to buy from the US to make it happen. Since the US Dollar is a reserve currency it is used to settle debts between nations around the world. The commodities can be bought anywhere in the world and the effect will be higher commodity prices and lower dollar value, because people will be trying to get rid of dollars and obtain commodities. Simple supply and demand. If demand is greater for commodities than dollars commodity prices will rise and dollar value will fall.

Imagine what happens to commodity prices when the hedge funds start buying. Now imagine the whole world doing what the hedge funds do, with US dollars.

 Then you have to remember that if it is only US dollars doing the buying, the commodities may not raise much in price in other currencies. It is really hard for us as Americans to think in terms other than the dollar being the standard of measure. If you start thinking of some other standard of measure, such as wheat, corn, gold, etc. it is easier to see that sometimes it is more the currency losing value rather than the commodity being worth more. If corn price doubles in US dollars but stays relatively the same in other currencies it means our dollar has devalued by half. It would also mean it would take twice as many dollars to buy the same amount of the other currency. It would also mean that everything we buy from those countries would cost twice as much in US dollars than before.

That is how the results of the inflation will manifest itself. Crop prices and other assets will raise in price. We farmers will think we have it made for a while. Then we will realize that everything that is imported will cost more. Also everything that has demand overseas that we produce here (think fertilizer) will cost more because it will be bid up in price. Those who handle the money earlier in the inflation get the most benefit from it. The increase in crop prices will help us early on (like it did the last time prices ran up) but then inputs will catch up (like it did last time) and we will be back where we were only handling more money (more in and more out).

We are the lucky ones because we as farmers tend to own quite a few hard assets that maintain value (that is how a 4020 is "worth" as much today as it was when new. It is not really worth that much, inflation has just mask the loss of purchasing power of the dollar). The ones that will be hurt the most are those on fixed incomes. Retirees, pensioners, US government bond/bill holders, those holding lots of cash, etc.. Only the expense side of their ledger goes up, income stays the same. 

John