Commodity Bubble Proponent

Deflation Fears Hearken Back to a Simpler Time of Sound Money

I'm going to call bulls*** on the inflation argument for two reasons:

1. The inflation already occured during the massive derivatives/credit bubble that occured between 2001-7. Since this bubble is now collapsing on itself, the speed at which capital/equity is being destroyed is far greater than the governments ability to pump money into the system.

Since October of last year, world stock markets have plunged by some $22 trillion dollars in market value, not to mention the collapse in global real estate values, derivatives, credit default swaps, etc.. This is a FAR FAR FAR FAR greater number than the $2-3 trillion of "stimulation" that the Fed is providing right now.


2. Commodities were a bubble with a capital B. If you followed Jim Rogers and T.Boone pickens advice one year ago, you'd be down 50% on your investments. I'm not much of a genius, but the S&P has so far outperformed all of the commodity gurus.

I fully expect Gold to collapse under its own weight once these leveraged ETFs start having to sell due to the credit crunch. Given that gold ETFs are the third biggest holder of gold in the world, once they have to liquidate all hell will break loose.