Commodity Bubble Proponent

U.S. Recovery Could Push Oil Much Higher

This is an economic bubble driven by the Federal Reserve and really really cheap money.

We currently have a negative real interest rate, which stimulates demand for commodity related investment.

There is no supply shortage, Iran has tankers sitting at a port with millions of barrels of oil they can't sell, Saudi Arabia is increasing the discount for ALL of it's grades of crude oil relative to WTI, and inventories are at comfortable levels.

Peak oil is an amorphous concept that nobody can accurately predict. Will it happen at some point? Probably. Can anyone say for certain that it is now? No.

I think that the debt bubble collapsing and the resulting fear has more to do with this commodity run up than anything else. The US Fed has mismanaged the world reserve currency and keeps pouring more gasoline on the fire with more cheap money.

Nobody really knows who's speculating in what in the energy markets because nobody monitors the ICE exchange and the derivative trading outside of the NYMEX.

Everyone uses peak oil as an excuse to explain this away when really this commodity boom is a function of excess money and low interest rates. The thing that should make you suspicious is the fact that EVERY SINGLE COMMODITY IS GOING THROUGH THE ROOF AND EVERY INVESTMENT BANK IS PREDICTING AN IMMINENT SHORTAGE OF EVERYTHING. For example, sugar has climbed up ridiculously even though there's a hideous surplus of it around the world.

In 10 years, I'm sure everyone will be screaming about commodity derivatives, ETFs, and horrible risk management at investment banks because of this