Just my absolute humble opinion, but I think there a lot of greedy ass f**ks that are going to wish they considered taking profits in most commodity sectors now, when we look back at this time frame. By the way, there's nothing wrong with greed. There is something wrong with irrationality, and that's just the state you're living in if you deny that EVERY single commodity boom has been followed by a massive bust. I know, I know....'but, it's different this time..." Right, and the price effect on demand on the supply/demand curve is no longer relevant....
This thread ignores dollar devaluation. Dollar goes down, commodities go up. Factor in the dollar decline and all the prices make perfect sense.
Yeah when I got my cancer verdict and went to see a dietecian first thing she told me was get on Dairy as it fucks your immune system. I only have goat and sheep milk now and love milk will kill you
That's a good point. But only for non-domestically produced ags, and even for imported ags, the proportions are out of whack. Oil has gone from $55 to $112 a barrel in the last 7 years. And $45 of that increase has been in the last two years. Corn, which was trading at sub-$2 levels, is now $6+ a bushel. *I do not drink milk from animals. Humans were not meant to consume cow, sheep or goat milk (especially hormone, steroid and antibiotic laden ones). The next time you see a human suckling on a cow, goat or sheep, call me on my cell, b/c I want to take a pic.
Anybody has noticed what is going on in Haiti? Buying more expensive pretzels or $4/gallon milk might not put many of people in the US in the poor house, but thee are plenty of folks who will enter a very lean period if those prices stay where they are (outside of the US that is).
Anyone remember the sugar "shortage" of the late '70's/early '80's. The newspapers were full of stories of housewives denuding supermarkets of sugar as they stocked up ahead of the "shortage". The supermarket sugar shelves were full of ,............... well sugar, at all times. Somebody took a photo of maybe one shelf that got denuded and that was the story. Maybe it got denuded because a lorry broke down, maybe it got denuded because a photogrpher paid people to go in and buy all the sugar. Right now there are rice shortage stories, yet I and the rest of the population were able to buy rice last night. http://charts.quote.com/ifs/cftcifs...55&studyheaderbackground=0,64,128&random=2880 If you walk down Sugar Quay in London you can look into the ground floor dealing room of Tate & Lyle. There seem to b an awful lot of people in there, more than what you would think wuld be necessary to run hedges. In the '70's someone told me of a discussion with someone who owned a company called shortages inc who created shortages by buying up the float and then releasing it very gradually onto the market, thereby generously helping to relieve the shortagge from their own stocks. Check out if anyone is buying Copper at the minehead and then holding it until people are forced to buy the exchange stocks which are actually a source of last resort. Check if anyone is subsequently releasing the minehead copper back onto the market. Check the price action in copper and gues if the price action matches the above. Anyone remember a group of traders called 'The Winchester Group' who cornered LME copper for a while? http://charts.quote.com/ifs/cftcifs...55&studyheaderbackground=0,64,128&random=8126 There is ALWAYS an infinited demand finite supply story, because there has to be a story f this kind to pull in the unsophisticated public and money managers. Prices are going up, agreed, because of genuine demand (with overestimated demand growth going forward), higher transortation costs, USD weakening, and because of speculative funds inflow.
The energy price was bound to make its way into the domestically produced goods eventually. If you forecast further devaluation, the prices seem reasonable. Obviously, there'll be short-term distortions; however, I think we're at the start of a major commodities leg that will shake world economies to the core.
well said. I don't think we are going to see the commodities come down until we get into a deflationary period. That isn't going to happen until the govt allows this bubble to pop, and it is very possible we could continue this cycle for some time. When deflation occurs it will not be a happy time for anyone accept those that are cash heavy. But I agree with your point of view that we are going to see a large commodities leg or i guess you could say a continuation of the current commodity trend. i think it will eventually force the fed's hand to induce deflation and then POP. But I still stipulate that commodities are no more overpriced nor overspeculated than stocks. And speculation can certainly be seen to have a more sound basis for commodities like oil where there literally is a finite amount available, intense demand and reliance and no real alternative.
We will see deflation sooner than most people expect; especially the people hoping to squeeze the last $10 dollars out of barrel of oil, the last $105 out of an ounce of gold, or the last $3.85 out of a bushel of summer wheat or soybeans. I don't know when it will set in, but it will, eventually. Higher prices leads to demand destruction. People who consume rice, wheat, oil and palladium can't just go home and grow money on their backyard money trees when prices rise. They curb consumption eventually. It's a natural law, and it will never change, and it commodity booms, just like other asset booms, always end the same way - with a bust. Goldbugs and oil speculators might as well deny the existence of gravity.