Martin Hutchinson in Money Morning says that over the long-term oil and agricultural commodities are likely to deflate.

This is because, once the threat posed by the U.S. housing crisis has passed, the Federal Reserve will be forced to increase interest rates to fight inflation. Other countries will follow, which will deflate the commodities boom.

Increasingly in recent weeks commentators have begun speculating about the dreaded “S-word”- stagflation- and whether or not such a protracted period featuring both high prices and high unemployment would blight the U.S. economy.

Oil prices have resumed their northward climb. And inflation has returned to the American lexicon for the first time in decades. For U.S. consumers, there’s no way to dodge the financial fallout of that economic one-two punch.