Outside the Box

Commodity Bubble and The Dollar Spin

John Mauldin

May 15, 2006

We are almost half way through the year and the markets are providing us with plenty of trends and issues which we must take into account. From 6 year market highs to the cooling of the housing market, from the energy bonanza to China's effects upon globalization, there is no shortage of topics of interest in the financial press. But as of late, I have been receiving several questions from my subscribers focusing special attention towards the recent commodity boom and the dollar with respect to the future of both.

Morgan Stanley's Chief Economist, Stephen Roach, provides us with some valuable insights on both of our subjects at hand. My long-term readers are familiar with Mr. Roach and the independent perspective that he provides on noteworthy economic conditions. This week's Outside the Box encompasses not one but two of his articles, a global outlook on the "Commodity Bubble" and "Dollar Spin." I entrust that you will enjoy Mr. Roach's commentary and seek to glean some wisdom from this wealth of information.

John Mauldin, Editor
Outside the Box

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Global: Commodity Bubble

By Stephen Roach

"In the midst of a slightly subpar upturn in global growth, a low-inflation world is experiencing the sharpest run-up in commodity prices in modern history"

* What's new
Asset bubbles have dominated financial market experience over the past six years. The world is now in the midst of another bubble -- this one in commodities. It, too, will burst. The only question is when.

* Conclusions
In the midst of…

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