We have a large problem unfolding before our eyes.
Rising commodity prices and rising stock prices simultaneously.
This would mean at some point, stock prices are going to get crunched be demand problems rather than supply problems. In turn, then demand for goods and services will fall. Then stock prices will fall. Then commodity prices will fall as inventories rise.
This is likely to happen very very quickly, hand in hand.
This is likely to take place in a major sudden shakeout of all worldwide commodity and stock prices.
I predict a fall of at least 30% from the current prices. If the prices continue to rise from now, then that will be additional cream which must be blown off.
Beware of the stock/commodity price spiral everybody.
You have been warned!
I suspect something rather nasty lies ahead in 2005 and 2006. It may even happen earlier. But the crunch must happen. It can't keep on going on like this.
