The 70's I remember my parents buying items in bulk, beacuse the prices would rise so quickly. I had a job at $1.50 per hour. (1975) gas was 40¢ a gallon milk was $1.19 a gallon. hershey candy bars a dime.
The inflation has just very recently started. It will take off with a vegence later this year, like it did in the 70's.
The differences
1) Back then the US was a Creditor nation, today USA is a debtor nation.
2) Back then there was alot more above ground silver available then today
there are more dif's but they don't come to mind.
IMHO the reason commodities are taking off is because QE QE lite QEII were poured into the equities because a strong stock market is an indicator of a healthy economy. The Plunge Protection team has been very very busy in 2010. And the market is realizing this. P/E ratios are out of this world. check out
http://market-ticker.org/
And China's economy is growing robustly, so they need metals. China has a gazzillion USD's and want to spend them. Like you stated earlier, the USD is heading down, so it would make sense that with alot of dollars in the foreign markets, and commodities in need in China, commodities are going to go through the roof. I can see $6 a lb copper this year, maybe even $10 a lb. if the fit hits the shan. only time will tell.
deflation in housing in the US will continue You cannot buy a house if you are unemployed. And with "real" unemployment at 23% that's alot fo houses people cannot buy.
china needs metal. US doesn't need metal. China need food. china needs Cotton. where do you think China is going to get the raw materials she needs? From the US.
Now here's the most important part. Since inflation - by definition - is an expansion of the money supply. What's going to happen when China repatriots her USD reserves? (translation : China spends her USD buying raw materials from the US i.e. cotton, wheat, corn, silver, gold, copper) Answer: Prices will rise.
I've followed PMs and the dollar and I noticed that the USD would go down, causing the Price Of Gold naturally to go up as it's priced in dollars. Then the dollar would rebound, but the POG would remain steady. rense repeat several times and POG is 1400+ dollar still around 80. Until 12/31/10 that is when the dollar started plunging cause Gold to finish at a daily high, weekly, monthly, yearly and all time high.
Legend has it that the Hunt Brothers wanted to give Texas "Real money" i.e. silver & gold so that Texas could cecede from the union.
when Comex kept increasing margin requirements, they were able to break the Hunt brothers stroghold.
Now more recently, Comex increased margin requirements on silver 3 times within a week (if I remember correctly) and this did nothing to the long term trend.
I'm sorry if this is a little long winded, but there is so much info that in and of itself seems trivial, but put together,,,
If you haven't ever read harveyorgan's blog I would highly recommend starting to read it.