Yael Pipano

Burst Bubble? Commodities' Long-Term Story Remains Intact

David: the below portion of an article I read yesterday says it all!
Why have the prices of commodities like oil and gold risen so dramatically in the last year? Why has the dollar fallen so much? Normal business cycle? Bad management from the world’s financial institutions? And why hasn’t the world’s largest and strongest economy, backed by the most powerful government, been able to change the course of the situation?

Perhaps the larger picture is that the United States is waging an economic war against China.

The United States could strengthen the value of the dollar. It has not. China is hurt because now Chinese products are very expensive in the United States, and this will reduce the US trade deficit with China. China must import huge amounts of oil and strategic metals which are very much more expensive now. China holds hundreds of millions of physical dollars, the value of which is now much less.

Burst Bubble? Commodities' Long-Term Story Remains Intact

misterchan, you're one of the clearest thinking individuals on this site, I wish more wrote similar sentiments that make sense! People reading weekly data and then applying it to their portfolios (especially those on margin, using derivatives, and covering shorts) are part of the craziness in the markets now. Those 'panic traders' are the reason long term investors like us make money in the LONG TERM...