Crude oil rose to $100 a barrel for the first time in New York as record global fuel consumption threatens to outpace production. The 3-figures oil prices appears to be here to stay. Commodities elsewhere also continue to rise. Gold soared to a new high of US$860.10 an ounce while wheat and soybeans rose more than 3%. This rally in commodities was largely caused by the weakening US Dollar against major currencies. As US Dollar falls, it enhances the appeal of raw materials as hedges against inflation.
On this side of the shore - would the Malaysian Govt increase fuel prices? In the Financial Daily today, PM Datuk Seri Abdullah Ahmad Badawi said that the government will have to increase gasoline prices "when the time is right"- two days after a pledge to cap tariffs at the pumps ended. Travelling would cost$ more $$. Food $tuff would likely see further hikes. Roti Canai would cost$ 15% more. The inflationary cycle goes on...and on... HOWEVER, there is one BIG problem to all of this though - the disposable income the stays the same. :(
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