As reported in the Feb 29, 2008 issue of The Wall Street Journal, the American dollar is falling in value at a record speed. While it's still way to early to predict the dollar's demise as the world's dominant medium of exchange, it does appear that a major change in the American way of life is at hand. The dollar is merely the bellweather of this change.

America has weighted itself down in debt, necessary and otherwise. As a consequence, foreign investors including the "Sovereign Wealth Funds" owned and operated by foreign governments have stepped in and bought substantial holdings in the American financial system. The American financial system is being propped up by foreign capital to the point where the value of the dollar has been diluted far enough to make it bottom out in foreign exchange versus a wide basket of world currencies. This, combined with the fact that Americans have consumed way more than they have produced has weakened the dollar substantially. In essence, America has been a net consumer and a net debtor for such a long time that the perceived value of "things American" has dropped to a new low.

Commodity prices have surged to record highs lately as a result of the flight of capital from stocks & bonds to commodity speculation. Crude oil and petroleum distillates have not escaped this phenomenon either, with the price of crude oil rising to a new record level by oil speculators of $102.59/barrel this week. With surging oil prices comes collateral damage. Biofuels have diverted farm acreage away from crops like soy and wheat and towards corn, an essential first material in the manufacture of ethanol. The result? Record costs for bread, meat, cooking oil, and ...raw materials for bio-based printing inks such as soy oil.

An unintended consequence of globalization has been the spread of American-style consumerism. Combine this with a growing world population and an emergent middle class in Asia and the entire world (with the exception of Africa) now finds itself chasing the very same commodities that were formerly reserved for mainly North American and European consumption. Too many people chasing too few goods has sent commodity prices soaring.

There is absolutely no part of the world economy that will escape the consequences of such price surges. Even the cost of transporting industrial materials like ink has nealy doubled in the past 2 years.

We don't see this problem going away soon. Be prepared for even more increases in the price of printing ink in the coming months. They're going to be unavoidable. For instance, the price for Soy Oil that we pay just increased by 18.2% today.