Cotton price surge matches other commodities; Inflation and its consequences for real estate

I have written earlier about rising prices in such commodities as wheat, fuel and gold. Now cotton has joined the list of commodities with surging prices:

The cotton surge is part of a broad-based commodities rally since the beginning of the year, underpinned by fears over a weakening dollar, healthy demand from emerging markets and various weather-related supply disruptions. Along with cotton, prices of so-called soft commodities such as sugar, orange juice and coffee all have soared, adding to concerns that consumers might soon be paying higher prices for daily necessities.

Surging cotton prices should have the same effect on agricultural real estate as surging wheat prices (although not directly in Pennsylvania).

As commodities surge, the dollar declines.

It is better for investors to consider the effect of an overall commodity surge now before the effect on real estate prices becomes apparent. Rampant inflation, if and when it arrives, will affect all real estate prices regardless of interest rates.

Gasoline price movement and real estate prices

I have written previously about gasoline prices - particularly how movement in gasoline prices can foretell a broader inflationary climate.

Locally, the price at the pump has increased roughly 20 cents per gallon in the past week. This is a major increase that bears implications for the economy as a whole, particularly real estate prices.

On the other hand, crude oil prices may have begun a pullback globally.

We do not really know which way oil related prices may go, but whichever way it is, real estate prices should go with them.