Random economic thoughts for the day…

• We are currently in a commodities bull market (driven, in a large part, by China's demand for raw materials, and the decline of the dollar). Witness the huge run-up in commodity prices over the past three years. This chart shows the increase of the Reuters CRB Commodity Index. Have a look at the sharp rise from 2003-2006.

More information on the increase in commodity prices and real asset funds.

• We are on the verge of seeing an inverted yield curve for the first time since 2000.
• The U.S. is deep in a pile of its own debt. According to Bloomberg, "To compensate for the current account deficit and maintain the value of the dollar, the U.S. needs to attract about $2.5 billion a day from overseas, or about $75 billion a month." Those are insane numbers, highly unlikely to be met.