Raw materials costs are high not only because of the increasing demand for these materials in southeastern Asia, but also because EU and USA both still have very high customs protection against imported raw materials. Sugar in EU and steel and ethanol in USA are good exemples.

Free markets are a good way to control inflation.

It will take a long time for people to pay off their heavy mortgage debt and the slump in the housing market is not helping any one. Americans in particular must start to save more and not spend, spend, spend.

The Dollar must continue its devaluation so that the Deficit Lump will be, proportional to the total GDP, smaller to pay back.

This means inflationary pressure on prices in USA as America is very much dependent on imports. And this is another reason for wage increases....

Protectionism will not solve the problem of consumer debt. Cheaper imports stretch low wages to cover all needs and if the customer is forced to buy more expensive domestic products, or imports that cost more because of import duty, they will be under further pressure. Wages must catch up with price inflation in assets (houses, stocks) and commodities (oil, copper, cement, .....). Right now, western companies, especially Americans, are keeping wages low to remain competitive.

Spending power of consumers must increase. In France, we must also review our laws that restrict work to 35 hours a week and other labour practices that are a big problem to start a large business. But this will be a very fragile matter here as unions are very strong and we are entering the election year in France.

Yes, the only way to pay back this budget deficit of ours is to have more wages so that people can be taxed! Otherwise, the main asset of most households, i.e. their homes, will continue to lose value as the purchasing power of the secondary market continues to drop. I cannot see interest rates going down again, so the only way to pay back this debt is to increase incomes.

I cannot think of a comment for your prediction, but I want to make a suggestion. There is an amount of feces growing under your nose - it would be good of you to wipe it clean.

When powerful countries are pushed hard economically there are two common responses. The first being to cause increase the trade frictions with countries like China and Russia. The other is to increase other frictions with countries like Iran and North Korea to pressure China on consumer goods and Russia and Iran on the raw material oil.
It is still not a free market, economics by other means is still a common option on the table.

Can anyone say "peak oil"???

(Hint: google "peak oil")

The writer seems to know what is on the mind of most people working here in Germany. Costs have gone up, but wages have not kept up. We need more euros in our pocket.

Yes, we need to keep an eye on the economy as well as international cooperation in the WTO and the global village.

Cash or bust....that is the question!