They say there's no cure for high prices like high prices. It really feels like this is what happened with commodities: after a while, the prices just got high enough to weaken demand. As I mentioned briefly a week or so ago, commodities markets have been falling fast recently, led by oil and gold but including most of the base metals and agricultural commodities as well. Most of us will be breathing a huge sigh of relief - the government says gas prices are at a 14 week low, and food prices should nudge downward a bit as the USDA is predicting record global harvests.It will be interesting to watch whether or not the dollar can continue its ascent. As I've written before, I'll be surprised if oil goes much lower than it does, and of course, this doesn't solve any major problems over night. There's still strong, fundamental, long-term demand for more food, energy, construction materials, etc. But hey, it's still summer: let's enjoy it while we can. Maybe now you can afford to drive to the beach.
Update: Perhaps I spoke too soon about food prices easing: as of August 21st, the USDA is predicting the largest rise in food prices since 1990.
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