The cost of living in the U.S. rose at its fastest pace since December 2009 in the year ended in March, the same month when Chinese consumer prices rose by the most since 2008.-Bloomberg report

Rising commodity prices can bring inflation.  Commodity prices go up when there is an expected higher demand than supply (or speculators playing the market).  Today, May 5, commodity prices are falling.

Some people blame an increase in the value of the U.S. dollar, but has it really gone up that much? When the U.S. dollar is up, it makes commodities that much more expensive on the world market, because commodities are traded in U.S. dollars: “The common denominator for all the commodities selling today is the strength of the dollar.”-Bayram Dincer, LGT Capital Management Ltd

Others are pointing out that commodity traders are realizing that the world’s economy is still bad, and that the average person can’t afford to pay higher prices.  That means demand will go down.

If you buy commodities (oil, gas, metals, food stuffs, etc) why bid higher when there’s a good change you can’t sell it on the retail market?  Some analysts think this will be the crash of the commodities (which is a good thing for us little guys): “This could be one of the most severe corrections that we’ve seen over the last year. If things get really bad, we could possibly retrace half of the rally of the past six to nine months.”-Sean Corrigan, Diapason Commodities Management SA

How about the fact that a little known company, Glencore, who turns out to have a lot of say in the commodities market, has told their clients to be “underweight” when it came to commodities.  Glencore expects prices to actually go up in the next 12 months.  Being “underweight” means to sell off your investments, so maybe what we’re seeing is an intentional, and temporary, sell off.  A sell off would drive prices down.