The surge in interest in comodities by speculators is following the decline of property and leveraged buyouts of companies. It is fanned by the globalisation of information and finance and access to worldwide stocks/options of these comodities. It is here to stay albeit in a cyclical manner. You are a bright man, but I suspect that you advocate the market to set prices. In the context that I have set, that aint gonna help the poor. Those hedge funds rely on their huge salaries to offer a little charity.

I find it quite interesting that for all the talk of $200 oil, these oil prices are not in least reflected in the equity markets. Shell, BP and the rest have been going sideways for years, stock price wise.

This makes no sense, because although they are all short of crude oil, they do all produce at least some (which is just cash to the bottom line) and refining margins are holding up very well.

This suggests that oil markets and equity markets have currently irreconcilable perspectives on the proper value of oil.

I suspect that it is the equity chaps who have it right. There has been such a shortage, over the last few years, of places to put capital to work that amounts of it are presumably now finding their way into hedge funds whose idea of market participation is to buy short-dated oil. As such, the oil price now reflects not so much the supply and demand fundamentals of the energy business, so much as those of the investment business.

It is a mark of how desperate the Fed is that there are so many innovative credit facilities, typical of government it is offering a solution to the last problem, when confronted by something new government has no clue what to do. We have moved on from the credit crunch, this is now a solvency crisis.

You were right when you said you cannot have inflation during a credit crunch, what is actually happening now is that liquidity is being provided by the central banks but not fast enough to keep up with the billions in asset value that is being destroyed.

The cruel truth is, ‘value’ is being destroyed faster than it is being created. So yes, there is unlikely to be infaltion in the short term.

You said the other day, the US economy is not in recession. Have you ever heard of a government giveing cash back to the tax payer? The US stimulus checks are another indicator of the desperation of the US government. They hope it will stimulate the economy, there is almost no chance of that, most people who recieve such a check, if sensible, will use it to pay down debt.

Here in the some of richest farmland in the world where almost anything temperate will grow (asparagus now and strawberries soon) the fields are green with biofuels and yellow with rapeseed. Farmers have been leaving quite a lot of land unploughed up to now. Animals all went in the BSE/foot’n'mouth fiasco.
And our farmers are trammelled by the most ridiculous rules coming out of the EU. The RSPB is dictating how they should plough and when so as not to disturb breeding birds in the dykes. Then there was the brilliant idea of the 10 metre conservation headland which now seems to have been dropped. Apparently farmers are doing more and more paperwork to get their CAP grants and, yes, even those were late under Margaret Beckett.

Meanwhile Africa is breeding fast and Malthusian wars and famine are starting up. Apparently the Indians and Chinese are wanting meat. But, no, it is biofuels under the EU directive.

And, let us remember, it is the French, our rivals, who are driving the CAP.

In any commonsense world (and the world of farming in the Fens is not that world), production would be meeting demand.
Once again, a challenge is not being met by the politicians who presume to interfere with the invisible hand.

The fact that Sterling has deliberately been kept overvalued now means that we dare not cut rates without letting inflation into the country on the back of imports. The correct policy now must be to try and maintain a steady differential between Sterling and the Euro to protect us from importing EU food-inflation. The future Conservative government must look at ways to substantially increase agricultural production, particularly with the aim of supplying our domestic market.

The information I have to hand all points to non-food fmcg imported goods getting an awful lot more expensive.