Bruce Pile

Too Much Money Chasing Too Few Commodities

Even if there were no currency debasing issues, most things in the commodity space should be entering a long bull market simply due to supply and demand for global construction metals and the imposition of fuel crops on an already maxed out food crop market. When you look at what just the currency issue is doing with a commodity having little practical use, such as gold, it suggests a compounding effect where the things of the most vital practical use, such as food and fuel, may attract money at a faster rate adding still more to their appeal as a dollar hedge.

The crops market in particular will be under huge pressure from the effects of peak oil and the aggressive but misquided food based ethanol mandates. Compounding idiocy with stupity, our government has responded from their 35 year sleepwalk on energy policy with the idea of hogging the food supply to make a low EROEI foreign oil replacement that actually displaces very little oil and serves only to add severe food inflation to severe oil price inflation, which they greatly help out with their severe currency debasing campaign. How many "stupid" pills do these guys take a day? If they're going to do ethanol, wait intill the high EROEI, nonfood cellulose designer feedstocks are out of the labs in a few years instead of grabbing up whatever happens to be laying around in our backyard and causing inflation havoc.