The Commodity Investor

Some countries win and other countries lose.  While the fortunes of a certain geographic area of the world certainly can change over times, there are some areas in the world that are doomed to poverty forever.  One of those areas is Pakistan.  [Read more →]

Aluminum, the most energy intensive of all commodities, is starting to feel the heat from the energy crisis.  After prices pulled back in the later part of2007, and metals looked like they were finally taking a breather, aluminum has now surpassed its high set in 2006 to set a record at $1.50/lb on Friday.  [Read more →]

The week ending July 4th, 2008 was a bloodbath for world equity markets.  Of the major indexes, only 2 were positive for the week overall: Austria, which gained 1%, and the Czech Republic which skyrocketed 7%,  despite the financial stress in the system globally. The worst performing markets got crushed, with the Pacific Rim containing 6 of the bottom 10 performing equity markets for the week overall.  Outside of Asia, Ireland, Brazil, and Chile were the worst performers, dropping between 6-8% each, with Turkey putting up the worst numbers, dropping an outrageous 10% in a single week.  [Read more →]

Stocks throughout Asia have been getting hammered recently, as the worldwide financial crisis worsens, and has reached virtually every country on the planet.  The Japanese stock market index has now been on a consecutive losing streak of 12 days, its longest such streak in 5 decades. [Read more →]

For years now, the Euro currency has been on a tear, killing the US dollar and most of the world’s other currencies along with it.  If we look solely at the Euro/Dollar relationship, the past few years has not been that big of a surprise.  The Dollar has huge debts hanging on its shoulders and external debt is mounting by the day to the tunes of billions of dollars thanks to Asian central banks.  The printing press in Washington is increasing the supply of dollars every day, debasing and devaluing the currency, and inflation is being totally ignored by Mr. Bernanke & company, leading to lower interest rates, despite oil rising to $140/barrel.  The Euro on the other hand, has strict requirements on balance of trade figures, and has been far more hawkish on inflation than its US counterparts.  This one way relationship, however, has gone to such an extreme, that virtually everyone on the planet is bearish on the Dollar.  While certainly the Euro is a better currency than the greenback, the US economy is still far more potent than the ticking time bomb in Western Europe.  The Euro bubble has reached its climax, and will reverse course over the next 2-3 years in major way. [Read more →]

With energy prices rising, followed by metals, followed by agriculture, there is only one sector of the commodity boom that has yet to rise:  The Meat Sector.  Not only are prices at an excellent level for smart buyers, but the fundamentals of the industry are prime for a takeoff in the sector. [Read more →]

With prices of agriculture on a tear lately, and continuous reports about how the price of rice has caused riots worldwide, consumer attention to food inflation is now rising for the first time since perhaps the Ethopian famines of over a decade ago.  The world has gotten used to cheap food and the shock that such products obey the laws of supply and demand just like every other item is causing anger among people all over.  It is especially hurtful in the developing world where many spend over half their incomes on food prices.   A return to the famines that were so common in the world previous to the 21st century is a highly likely possibility over the next few years. [Read more →]

With oil approaching $120/barrel,  and pundits everywhere calling for $4/gallon gas by the summer driving season, market psychology has shifted so much towards continued price increases for oil, that no one is even considering the possibility that the opposite could occur.  This psychology is typical of a turning point in the market, and it would not be surprising to me if we are now reaching a multi-year high in oil prices that will not be surpassed until the economy recovers, likely well into 2010 or beyond. [Read more →]

A media war recently has pitted the former “guru” of central banking against pundits who claim that he is to blame for the current housing crisis.  Mr. Can-Do-No-Wrong of the 1990s is now being accused of sacrificing the long term to save the short term crisis that existed when the tech bubble burst.   How much of an effect did long lasting low interest rates have on the housing bubble in America, that is now threatening to throw the economy into a recession, or possibly worse?  And is Greenspan’s argument that the run-up in housing being a worldwide phenomenon exalt him of any wrong doing in this matter?  Those issues are discussed below. [Read more →]

Rice, the staple crop of half the world’s population has risen to a 34 year high on the back of increased demand not being met by current supplies.  With world stock declining and worldwide stock markets and economies in the tank, a perfect storm may be brewing. [Read more →]