I thought some of the discussion on the thread Today's Bonds deserved a venue of it's own. Something that buttresses Waggie's inflation view is the extreme backwardation in commodity spreads. While much attention has been focused on Energy and Grain prices, the market is trading at substantial discounts in the future. New crop beans for delivery in November are at a $2.00 discount to May/04 and Nov/05 is at a whopping $3.00 discount. Similarly, Crude futures are priced back below $30.00 after the summer driving season ends. Commodities as expressed in currency prices of non U.S. developed nation's have really not risen despite the dollars fall. If the crude strip remains static, oil prices will be the lowest as priced in Euro's or Yen that they've been in years.