its funny calling the current commodity cycle (i.e Oil) a top. With the property market here- you still here plenty from supporters that current prices (financied with debt LOL) are justified. I think the 2 are in reverse. Oil is surely not top of the cycle. Oil is a lesson in inflation and increasing money supply with some supply and demand sprinkled in. topped with a very thin layer of speculation (probably no more than 10% of price).
Problem isnt that oil is expensive,, problem is, that it was cheap for too long. In the US interest rates were at ridiculous levels in 2001-03,, they had a run away economy,, yet oil went nowhere...... now its catch up time. It may short term fail from here, and the US dollar WILL short term go up, but it will be short lived IMO. World oil reserves can only get smaller,,hence expensive prices in the future. But then why do we pay upto $300K for a 500sqm block of land 30km from the city centre when there is plenty of land everywhere in WA (is that not a top or justified)??? Economics is a wonderful thing and its amazing what money supply (i.e to oil) and debt (i.e to housing) can do to prices - fundamentals go right out the window. But it will always be short lived (in years).
