20 Oct 2009 - The risks of rising inflation in the next few years have risen. Oil prices are now near US$80; Gold Prices hit above US$1,060, Silver Prices at US$17.80...

If Oil prices continue to go up, it might derail Global Economic Recovery, in my opinion, the risk of a double-dip recession in Year 2010 or even 2011 has risen.

Regards.

Dennis Ng, http://www.MasterYourFinance.com

NEW YORK (AP) -- Oil prices jumped above $79 a barrel to a 2009 high on Monday before falling back as investors looked to U.S. corporate earnings this week for signs consumers may be regaining confidence.

Benchmark crude for November delivery traded up 18 cents at $78.71 on the New York Mercantile Exchange by midday. The contract added 95 cents to settle at $78.53 on Friday.

Because oil is bought and sold in dollars, crude essentially becomes cheaper for global investors and there has been a run recently on the Nymex.

A barrel crossed $75 for the first time on Wednesday and came close to $80 Monday morning.

Last week, crude broke out of a five-month trading range between $65 and $75 a barrel on a weakening U.S. dollar and expectations that oil demand will eventually recover as the global economy grows next year. A growing economy increases demand for energy.

Despite several straight days of gains in oil prices, analysts remained cautious.

The Dow Jones Industrial Index passed a psychological milestone this week as the Index broke above the 10,000 level for the first time in a year, although it then declined again to fall shy of the roundophobia number by four basis points by the closing bell. The Dow first broke above 10,000 more than ten years ago in 1999 and has since done so on 26 occasions. Yes, a ten-year buy-and-hold index investor has had no capital gain over the period!

Simple Maths: U.S. constitutes 24% of the World's Entire Economy, while U.S. consumers constitutes 70% of U.S. economy. Thus, U.S. unlikely to recover unless consumption recovers and without U.S. recovering, the World economy is unlikely to recover.

By Burton Frierson

NEW YORK (Reuters) - U.S. consumer sentiment fell unexpectedly this month, tempering optimism inspired by news of a rise in U.S. industrial production in September for a third consecutive month.

The two reports released on Friday suggest the U.S. economy may have closed out the third quarter with surprisingly strong growth but still faces huge hurdles since consumer spending is unlikely to recover quickly from the worst recession in decades.

The Reuters/University of Michigan Surveys of Consumers preliminary index of sentiment for October fell to 69.4 from September's 73.5, below economists' median expectation in a Reuters poll for a steady reading of 73.5.

The report said diverging prospects for the general economy and personal finances would affect the pace of recovery as consumers cut spending to increase savings and pay down debts.