Macroman on gold and oil

After yesterday's "shock and awe" move by the Fed, all wonder 'what happens now?' While I'm super-worried about the dollar in the long run (and, briefly, in the near term), Macroman is thinking of black and yellow commodities, not green currencies, today. And he's thinking that the black one is poised to skyrocket in price.

An excerpt, emphasis mine:

But consider the uber-bull case. In a world where gold trades at $2000, where is the oil price? Last year's oil rally was largely a demand phenomenon, some of which was real and some of which was speculative. But gold at $2k will pretty clearly be a monetary phenomenon, one which should impact all hard assets fairly similarly. When you throw in the multipliers that work in the oil market, via the monetary impact on the factors of production, Macro Man would submit that you should see a disporportionately large rise in energy prices. If you throw in the market pricing in an eventual recovery in demand volumes, the price impact could be explosive.

Gold may well be the superior trade for a 20% move. But Macro Man reckons that mid-curve oil is a far, far better trade for a 200% move.

For consumers, this would have the effect of creating even more uncertainty, and would for sure cause them to keep tightening the screws on all sorts of spending. Hard to see how any economic recovery is possible in light of a massive spike in energy costs. I'd for sure be really cautious about investing in just about anything that's not a hard asset (save real estate), still. There's the mother of all bubbles forming in bond markets, and equities are in a suckers rally. Looks like its back to Fall 2007, and time to hop onto the commodities bandwagon....