So inflation is problem in the emerging world, but not so much of a problem in the developed world.

This pattern will also dictate what happens to interest rates and to exchange rates. U.S. interest rates are on hold, probably through the end of this year and the same thing in Europe and Japan; whereas, countries like China, Brazil, and India are already raising interest rates and will continue to raise interest rates.

The interest rate patterns will also, in turn dictate, what happens to the exchange rates. The good news for U.S. farmers is that the dollar will continue to depreciate against most currencies over the next few years. A possible exception is the euro, where we could actually see a weakening depending on how this whole sovereign debt problem with Greece and Ireland and Portugal plays out. So the dollar will depreciate with a possible exception of the euro.

A few words about what’s going on in the Middle East. A lot of what’s happened to the oil prices in the last couple days is mostly because of fears — the old story of buy on rumor and sell on the news. There’s a lot of that going on right now. We think a lot of what’s going right now in the oil markets is temporary. We believe oil prices will come back down again, so we don’t have oil prices staying at these levels for much longer.

Let me delve in a little bit deeper into each of these issues. First, a few words on the U.S. The great news is, the U.S. economy is firing on more cylinders, though unfortunately not on all cylinders yet. Housing is still a big problem, but housing is only 6 percent of the economy. The rest of the economy is doing fairly well. Exports are strong, business spending is strong.

Businesses are very optimistic right now. They’ve got a lot of cash; they’ll spend it. Consumers are also much more optimistic now. They are worrying less about a double dip. The employment situation — while it’s still not great — is improving, so that consumer spending which is70 percent of the economy is doing fairly well. When you put all this together, and you’ve got a U.S. economy that’s growing fairly rapidly.

Europe, as I said, is a different problem. They’ve got major headwinds. The sovereign debt problem I mentioned. A lot of countries are tightening fiscal policy in a way that we’re not, at least not yet. But even Europe is a two-speed region. Northern Europe with the exception of Ireland is growing at 2.5 percent, and southern Europe (Italy, Greece, certainly Spain, and Portugal) is struggling, growing less than 1 percent.

Japan also has major structural problems. I mentioned deflation a couple minutes ago, but they’ve also got the highest debt levels in the developed world. We’ve been focusing on the fact that the U.S. debt to GDP ratio is approaching 100, but in Japan it is already at 200. So Japan’s got major debt issues going forward.

As I’ve already said, emerging markets, on average, are growing at least twice as fast as the U.S. A lot of these countries have very large populations, but they are also catching up with the developed countries. In this context, Asia is still very much the growth leader. It’s not just China; it’s India and Indonesia. Indonesia is growing at about 7 percent. Not a lot of people focus on Indonesia, a big country that is growing rapidly. Asia’s growth is broad-based. Everybody is mesmerized by China, but it’s not just a China story.

In the case of China, the official statistics say 9.6 percent; but China is growing at a 13 percent rate. That explains part of the reason why commodities are doing what they’re doing.

It is important to point out that the issues are different commodity by commodity. There are specific factors with each commodity that relate to inventories, to production, to supply response and, very importantly, to policies. This is particularly true in the case of agriculture.