Higher food prices, energy price spikes, and lower wages haunt the world for the next several decades – effect on stocks, bonds, dollar, and gold
Bernie Snyder
Jul. 21, 2007

The prices of grains have doubled because a lot of it is used for generating bio fuel in US. In China the price of eggs and meat has quadrupled in the middle of a sharp shortage. There is an acute shortage of milk and drinking water in India. Sugar is used to manufacture ethanol based alternative fuel to gasoline.

In the middle of everything, these the well paying jobs in US and Europe are shrinking very fast. The pressure on US lawmakers and the executive branch of the government to bring in cheap labor for the businesses, which fund their political campaigns, is a clear manifestation of deflation in wages.

In the mean time crude oil is planning to make a new historic price high. Higher food prices, energy price spike and lower wages haunt the world for the next several decades.

How do you cope up with that? Where does your investment and retirement portfolio land with all that?

The stock market is already reversing direction. The corporation will struggle and guide to lower earning for several decades. The bonds will fall due to higher headline Producer Price Index. Initially dollar weakens, and after few years or may be sooner, it will strengthen severely against all currencies.

The major problem will be in Asian emerging economies like China and India that is totally dependent on US consumer buying. The gold is a wild card. Most likely it will spike and then fall severely as US Dollar strengthens.

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