Everyone calling a top, oil to fall to $85.00

I take your point, but remember that sentiment on silver was wildly bullish back then, and all the signs of a bubble top were in place even before COMEX player their party-pooping hand. That isn't the case in oil just yet. If anything, the political risks are more bullish than bearish - a strike on Iran could send oil to $200 in a jiffy.

As for pension funds - $70 bill is nothing, that's one moderate-size pension fund nowadays. They had much more of that in tech in 2000. When pension funds have $1 trillion in commodities, then I might start getting worried.

Quite why Congressmen have a problem with that I don't know. Commodities are the only asset that has made money in the last year, any pension fund that invested in them has done *extremely well* for their retiree clients. Perhaps Congress would prefer old Americans to retire poor because they invested in Treasuries at a 4% yield? I guess that's the only way they can envisage continuing to fund the outrageous budget deficits they keep passing, especially once the dollar tanks even more and foreigners finally panic out of losing money on negative real-return bonds denominated in collapsing greenbacks. Way to go, government!

 

There must be uncertainty for prices to move.

If nobody expected lower prices, nobody would sell their contracts.

If nobody expected higher prices, nobody would buy.

Both sides, buyers and sellers, are needed for prices to move.

 

Im not sure that sentiment on oil and food is all that bearish. In the last month markets have gotten bearish on oil because it has gone stratospheric, but most people believe in the BRIC EM middle class revolution. Investors have been playing this theme for a much longer period than the last year.

Ive seen plenty of articles, blogs, books talking about peak oil or some sort of malthusian global debacle.

all of these ideas are perfectly plausiable and I believe them, but everything can go too far.

Remember, real estate was the result of cheap credit and a de facto hedge against a falling dollar. That didnt end well.

 

Pure horseshit.

All you need is one side. In fact, prices move much better when there is only one side.

 

Who would sell their contracts (so that others buy) if everyone were 100% sure prices will go up?

 

I hear so many people make this claim that I believe such a strike is close to being priced in already.