Article: The Start Of A Run For Gold

The price of Rice doubled in the last 2 months raising fears of fresh outbreaks of social unrest across Asia, where the grain is a staple food for more than 2.5bn people (See article in FT.com here)

This should come as no surprise since grains, energy, and just about every other commodity prices have risen a minimum of 50% in the last 6 months. And a strong physical demand and lax monetary policy will continue to fuel high commodity prices.
You might have also read that Carlyle Fund and Bear Stearns blew up in the past month. Two companies going down is not a cause of concern as companies rise and fall all the time. However, when considering they have about $300 billion worth of mortgage positions with their counterparty sweating, you begin to understand why the New York Fed agreed to advance $30 billion to help JPMorgan assume Bear Stearns positions. Last year, I wrote that the mortgage mess was minimum a $2-3 trillion problem. We are about half way through, so expect to still see massive write downs from pension funds, endowments in 2008, together with perhaps another major blow up besides Bear Stearns.

All those bailouts are creating moral hazards and the Fed has no room to raise rates to combat inflation. Monetary instability and fears of inflation are gold's best friends. This is why my focus right now is on precious metals. I expect the mortgage mess climax to take place in 2008, which will more or less correspond to a spectacular rise for gold this year.

http://www.gold-eagle.com/editorials_08/lee040908.html