I don't understand it all either, but I've been reading and looking for answers for a while now. Because our interest rates are too low and people can't put money into savings and get a big return they are looking for wherever the biggest return is. Right now, commodities (oil and grains and metals) are the biggest return.
The bad part, which is detrimental to Joe6Pack on mainstreet is that he doesn't speculate in commodities. He's not playing the futures market (yes, its paper contracts that have a delivery date and those speculating sell the "paper contract" before its delivery time and there's more "paper contracts" than actual supply.
That's another reason why the Japanese carry trade is detrimental. They give out loans to big business and elites at 1/2% and those funds are invested wherever they get the greatest return, which happens to be commdities. Its a vicious circle and we're gonna end up with a bigger bust than ever. As long as the Federal Reserve keeps lower interest rates to keep bailing out wall street, then mainstreet is going to face inflation.
These lower interest rates keep the consumer from buying gadgets because they are too busy trying to buy food, fuel, utilities and medicine.
IF the federal reserve would raise interest rates, then the commodities bubble would pop, (its gonna pop anyway sooner or later when Joe6pack can't afford it) BUT we've also got to put tarriffs on imported goods, otherwise we will be flooded with imports again. Japan and China have kept their money pegged to the dollar for too long just so they could flood the US with imports. The only way we can get our trade deficit down is to put tariffs on import goods but Washington can't see that. These trade agreements that export jobs to the cheapest labor country and all we do is import goods has got to stop. We're soon gonna be a third world country ourselves.
New York, New England and the West Coast have already started limiting food supplies because Americans are starting to hoard. I've always hoarded because it stems back to my fat days when food was comfort, so if I get stressed about something I fill up the cupboards and the deepfreeze with foods we use that is on sale. Hubby don't have to worry about me going to the mall!!!
I read these sites with frequency and the comments afterwards are just as good, usually.
http://elainemeinelsupkis.typepad.com/ (now I don't always agree with her greek mythology stuff and opera themes, I never liked those classes in school as it doesn't jive with the bible, but its helped me to understand more of the Jap carry trade)
http://globaleconomicanalysis.blogspot.com/
and there are several food articles here about one inch down on your side margin
http://www.informationclearinghouse.info/index.html
and this website is usually good
http://www.atimes.com/atimes/Global_Economy.html
I realize many folks want the doom and gloom to stop, but you can't put your head in the sand and until enough Americans wake up and get involved with their congressional leaders antics or lack of and start letting them know what they are for or against this country is going to continue on the wrong track. They were elected to serve THE PEOPLE, not corporations and we've got to start voicing our opinion. Its lunacy to continue to let congress get by and not serve mainstreet instead of wallstreet.
...I think my first question could have been better phrased.