Composite chart of four commodities indexes from Bloomberg:

Commodity Futures Chart

Remember this chart when some market journalist tries to claim the vicissitudes of supply and demand in a particular commodity are causing its futures prices to increase.  No.  Practically all commodities prices are increasing in lock-step, and that can only be caused by something that all have in common.  Indeed, their prices are all accounted for in dollars.  It is the cheapening of dollars, not a disjunct between cattle supply and demand, that is driving cattle futures higher.

Incomes/wages in America have to come down if unemployment is ever to be reduced.  Since nominal real wage declines are met with howls of derision (or at least are when they are even structurally possible), the only other route is with pushing down the real value of the wages by decreasing the goods and services that can be bought with them, i.e., by inflating everything except the wage rate.  Even Paul Krugman acknowledges (with approval) that this is the unspoken strategy of the Fed’s manic money printing.

Commodities inflation showed up around the same time as housing peaked, 2005/6.  It stayed through the implosion of the housing market, and on until the second half of 2008, at which point overall economic activity so precipitously slowed that the commodities boom turned into a bust. 

Both times, then and now, boom and bust, are classic examples of inflation/deflation, which is every and always a monetary phenomenon (but one that is mostly tied to the velocity of money and not its supply).

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