The troika of-government spending, Chindia, and a bullish supply/demand dynamic-give you the impression that inflation may well and truly take off in 2008.
In January Australian investors sold stocks and wiped over $170 billion from the share market. America sneezed and the ASX got blown over. What's worse, inflation in America is rising at the fastest rate in 17 years. It is far from over, something wicked this way comes...
Yet if you look past the shocking figures and negative sentiment, there's good reason to believe that 2008 may be kind to Australia's epic resource boom. There is one simple reason why, which I'll explain in a moment. But here's the important thing...
If I am right and we are quickly entering a new and volatile phase in the global economy...you can still make money from resource shares.
The bad news is that the easy money has already been made. But the good news is that the biggest money may still be out there. Let me explain...
From Gloom to Boom
Beyond the bear market in credit and the collapse of the housing bubble...one theme will dominate in 2008: the rise of epic inflation.
If my forecast is correct, food and fuel prices will continue to rise. Inflation will bleed into other commodities...especially agricultural commodities and precious metals.
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