Look at this chart! The CRB Commodities Index has not only been rallying for two years …
Its rise also ACCELERATED starting in June of last year.
It’s still FAR from the highs it reached in 2008.
And it has a long, lo-o-ong way to go.
That’s bad news for consumers of copper, lead, gold, silver, oil, wheat, and cotton — in other words, all of us.
That is, it’s bad news UNLESS you’re smart enough to protect yourself against this price surge with smart investments.
Heck, in the last two-and-half years, we’ve seen oil prices rise about 21% … food prices climb 35% … gold rally 73% … copper soar 108% … and silver catapult a whopping 222% higher!
There must be a reason behind a move this big!
But here’s my question for you:
What do YOU think is the primary cause of this rally in commodities?
I think I know the answer, and I’ll share my views with you soon. But first, I’d like to hear what you think.
CLICK ON THIS LINK to jump over to the Uncommon Wisdom Daily blog and join in the discussion. I’ll publish my feedback on the commentary tomorrow. Provided you get yours to me today, I’ll be sure to consider yours as well.
These can be confusing markets at the best of times. But in the middle of that chaos lies extraordinary opportunity. Together, we can examine the problem and make some very profitable choices. But I need your input to get the ball rolling.
Yours for trading profits,
Sean
{ 3 comments }
Sean, I understand that commodities are surging, but my questions is, are these commodities going up only because people are buying them with intent to resell them for more, or are they actually consuming them?
The primary cause of the current agricultural commodities rise in prices is supply/demand driven first and secondly due to investors looking for inflation coverage. The danger with trading in these commodities is that the governments of the World all have a “cheap food policy” and have a history of artificially neutering commodity bulls via large tools in their tool boxes.
Among others, Carter did it in the 70′s with the E word, Bush did it with the PPT and chasing large speculators out of the market and the mere suggestion of the “E” (embargo) and Obama could do it through many different means, maybe he will use some of the tried and true or something new like using the PPT and tax payers money to short the markets to the point of free fall. China has also done it with canceling large orders of grain at critical market points.
The danger with all this is that it is artificial and will have longer term implications. If you do not allow the agro-infrastructure to prosper to the point of gaining efficiency and increased production then you will find the dynamic of production increases eventually falling behind demand reaching a point of critical mass, “Katy, bar the doors” if that happens. Are we there yet? I don’t know. But we are closer today than yesterday.
Commodities traders WERE placing bets on our own consumption here in the U.S., but now they’ve expanded to global demand, because we’ve learned to lower or cease our consumption here. It doesn’t help that China is hoarding.
All hail Celiacs!
Recently, they’ve been moving out of gold and into foods–the next best hiding place for profits. Like CORE and HEADLINE inflation, the only difference is food and energy, and coincidentally, that’s where most demand lies. Both gold and oil have plateaued, so that leaves food as the only choice left. However, food inflation hasn’t hit every aisle in the grocery store–dairy, meat, and produce remain level or only slightly risen.
With yesterday’s announcement of the NYSE/German Bourse, expect derivatives to become the next hiding place. And you wonder why Obama is proposing mortgage reform…He wants to kill off Fannie and Freddie to kill of derivatives trading, but guess what? Somebody already found a way around that!