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News Link • Economy - Economics USA

Inflation Heard Round the World


Rising commodity prices threaten global economy ... Australians naturally regard high commodity prices as good, but they are now reaching levels that pose a threat to the world economy ... A range of forces operates on commodity markets. The weather in Europe, the continuing strength of the emerging economies and, for some of Australia's commodities, the recent floods all play a role. A common factor is the rise of financial investment, which has surpassed the levels of 2008. In part, there is a simple recognition by investors of the China story, with commodities providing a good way to obtain leverage. But there is also a flight from currencies, which has seen gold double since late 2008 with a 20 per cent rise this year. Many investors seek alternatives to the euro and the US dollar. – The Australian

Dominant Social Theme: Prices are up. A little inflation is a good thing.

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