DougM

Is the Commodities Bull Market Over?

FWIW I think you're right, but as we've seen this year, there are limits to how far prices can rise before they choke off the very economic expansion that fuels the boom in the first place. The market needs to find a balance between continued world-wide GDP growth and rising commodity prices. Ultimately, it will have to find substitutes for the most constrained resources or the growth simply can't continue.

Gold Bubble May Be Coming to an End

Should have been 65% jewelry - sorry for the typo.

Gold Bubble May Be Coming to an End

www.research.gold.org/.../

2007 stats:
2426 tonnes jewelry
466 tonnes industrial/dental
656 tonnes investment (including ETFs)
3547 tonnes total

So it looks like 15% of the demand is essential commercial uses, 20% is hoarded by investors, and 75% goes to jewelry. Sorry, that's not as persuasive as something like food or energy that people can't easily do without.

Gold Bubble May Be Coming to an End

For everyone saying gold's price is justified by supply/demand imbalance, how much of the "demand" is commercial and how much is just going into the hands of investors?

For everyone saying gold's price is being driven by inflation, has there really been 50% inflation in the past 6 months?

Fed Rate Cuts May Have Been Counter-Productive

"At some point in the months ahead, these funds will begin to move back into the stock market as investors grow tired of earning a negative real return on their savings."

That may be true, although today a good number of them are throwing their money into commodities.

"Viewing today's markets, a strong case can be made that aggressive Fed rate cuts have been counter-productive; Fed easing has exacerbated inflationary trends in the commodity and currency markets, while doing little to prevent the repercussions of the bursting of the credit and real estate bubbles."

Depends on what you think the real goal is. IMO the Fed's real goal is to prevent a collapse of the banking system. Banks borrow short and lend long, hence the stickiness of long-term rates (or the prospect of even higher rates if inflation expectations build) combined with negative real returns on bank deposits have the effect of slowly recapitalising the banks at the expense of savers. The Fed can't come right out and say they're trying to bail out the bankers that made all these bad loans because the FDIC can't possibly make good on the deposits if even one large bank goes under.

Commodities Gone Wild

How is it that the same bears that were trotting out charts of parabolic house prices during that bubble are apparently blind to the exact same thing happening in an asset class they like (commodities generally, gold particularly)?