Both Oil and Gold have dramatically risen in price in the last couple of years. Do you think that these prices are justified or is this another bubble waiting to burst? On a Supply / Demand view, has the demand actually tripled in the last 2 years or is it just a speculative market that is getting ready to pop?|||possibly.|||The rising price of oil, gold, commodities, food, groceries,... are all sharing the same cause, which is our weak US dollar.
Because we have 2 wars, because we have extremely high national deficit, because we have huge imbalance of our trade deficit, because we are gradually loosing competition to Japan, China, Korea, European nations ... by loosing our manufacturing jobs, ... our US dollar has hit its lowest level against Euro today.
Give you one example:
Given today's crude oil price of $118 per barrel, if our dollar still has the same value as 2 years ago, today's crude oil price should be only less than $80 per barrel. Another words, the difference of $38 is due to our weak dollar. One can use the same ratio to justify today's price of gold, silver, iron, ....
The rapid rising price of food, gasoline, gold, commodities, ... will pretty soon to force Fed to raise interest rate, which may easily push the whole country into a much deeper recession and will affect every one in this country.
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