AccordingtotheEnergyInformationAdministration,USgasolineusagedidbrieflydipbelowlastyear’s,butbymid-Novemberitwasbacktoitsusuallevels–ie,higherthanitwasayearearlier。

Apricespikeaffectedbehaviourforafewweeks,thenAmericansrevertedtotheirnormalgas-guzzlinghabitsregardless。

Nomoretryingcar-poolsandnomoretiringcyclerides。

Therearehordesofoilbearsouttherewhothinktherecentfallintheoilpricespellstheendofitsbullrun,butIcan’tseehowtheycanberight。

TheAmericansareclearlygoingtokeepdemandingvastamountsofoilandweknowtheChineseandIndiansarekeentocatchup(thenumberofcarsinChinaisdoublingeveryfewmonths)。

Yettheworldiscurrentlyonlyproducingafewmillionbarrels(atbest)morethanitusesupeveryday,sohowcanoilat$50-$60abarrelbeconsideredabubble?

Thenay-sayersarewronginflationdoesexist

Thefallingoilpricehasbroughtoutmorethanjusttheoilbearstogloat;it’salsobroughtouttheinflationnay-sayers,whosuggestthat,withoiloutoftheequation,wedon’thavetoworryaboutrisingpricesanymoreandwethereforedon’thavetoworryaboutrisingrateseither。

Ican’tseehowtheycanberighteither。

Inflationisn’tjustaboutoil。

Itisalsoaboutothercommoditypricesandmanyofthese,fromcoppertoplatinum,arestillhittinghighsonaregularbasis–evensilverisnearits18-yearhigh。

Inflationisalsoaboutcurrenciesand,asweknow,thepoundhasbeenfallingformonths,raisingthespectreofimportedinflation。

Andfinally,itisaboutwages,somethingweknowGordonBrownisworriedabout。

HetellsusthatanyinflationwehaveseenintheUSnumbersisallaboutoil,butifthat’sthecase,whyhashetakenituponhimselftowritetothepay-reviewbodiesinthepublicsectorandbegthemtokeepnextyear’spayrisesat2%,ratherthanatthekindoflevelspublic-sectorrisesnormallyrunatthesedays(over4%)?

Iimagineit’sbecauseheknowsthereisinflationinthesystemalreadyandhopeshecanstopitgettingoutofcontrol。

Nowondergold,everyone’sfavouritehedgeagainstinflation,breachedthe$500levelthisweek。

(Andifyoudliketoknowmoreaboutgold,seethereportbelow)

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