With the US Dollar making new lows, and the stock market in disarray, 2008 is off to a shaky start. The Fed is faced with few options, none of them very pretty. If they cut rates to try to soften the recession and prop up asset prices, they further lower the value of the currency those assets are priced in, hurting their true value. But the political consequences of doing the right thing – letting a recession wring the weakness out of the economy – are just too painful to seriously contemplate, especially in a presidential election year.
For the most part, commodities have stayed reasonably priced. Crude oil, gasoline, silver and platinum are all trading in the ranges they have occupied for several years. And even uranium, which saw a tremendous spike in 2007, has returned to about 3 grams per pound.
There are lots of opportunities out there. Just be careful to look at the true value of what you're buying – as measured in gold – and don't be fooled by the inflating dollar prices that are sure to follow in the wake of the monetary stimulus that is likely to be unleashed in the coming months.
ps – There are problems with the automatically generated charts for CAD, Copper and Wheat. I am working to update these so they will display properly. I'll let you know when they're working again. Thanks for your understanding!
