Buzz

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    • ON: Mon Mar 10th 08:35 AM
      Commented on:
      Commodities Bubble Needs to Burst
      The current environment is a commodity price bubble we have just entered into. This is the final stage/phase upwards in prices for most of the commodities. This will play out for the next few comming weeks.

      A comparison to the stock bear market of 1974-1975 is lacking one huge fundamental play. The federal government is holding down the cost of borrowing today. Check how the bond markets are behaving. Long bonds are rising in value. If the fed played the bond market as they did in 1929, we would see a complete collapse of our economy, and a depression that would be worse than the one we called the 'great depression', because of the amount of leverage and loans outstanding, meaning all mortgages and loans. We are so close to seeing an economic disaster here, but luckily the federal reserve banking and Berancke acted out by doing the correct thing, holding and lowering rates, not raising them! They (feds), recogonize the price spiral in commodities as a short term speculative boom. Yes, there is a real demand behind all this putting real pressure on the prices of commodities, but speculative interest is floating the price upward like a rocket due to the speculative buying in long contracts overwheling the market balances in the trading pits. The real producers are ready to fill those contracts and dump the raw product into the commodity markets. They (Federal reserve), are willing to let the speculative pop run its course and play out. A blow off is emminent with the CRB index. The price move up in all of the commodities are at an unsustainable rate. You will see prices spike up wildly in gold, oil and other major commodity items, such as corn, wheat, gas, copper, and platinum, etc. As this occurs, the stock indexes will plummet like a rock in a spike down. Expect a 500 to 800 point down day for the Dow and a spike down of 100 to 250 points in the nasdaq. This will be the bottom of the stock markets (end of the current bear cycle), coupled in time with the end of the commodity bubble. Bonds will rally in price, and the interest rates will continue to drop to the lowest levels seen in history. It will be very interesting to watch. Withe the fed making the final rate relief move, the dollar will sink at first then reverse upwards for a 'V' bottom. The dollar, stocks and the commodity markets will all market reversals in a coupled fashion, possibly within the same week. Stock indexes are putting in the fifth wave (and final wave) of the bear market in stocks downward, and it should form as a 'V' bottom reversal.

      Buzz


      This should occur within the next one to up to four weeks.

      It is like watching the same huge sum of speculative cash pushing each type of investment in a wild frenzy ride up in a spike. We saw it in the stock market in 1999 to 2000, check out the nasdaq long term historic chart. Then the money flowed into homes and land, pushing prices up wildly, now it is playing into the commodities. Prediction : Once the dust settles, expect a good end of year stock market comeback.
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