TheRealBull

T. Boone Pickens Holdings Down Nearly 20% This Quarter

Speculation has nothing to do with food commodities price increases. If you did your homework it would be plain to see that there are real supply issues in our inventory created by global inflation (aka currency debasement) and the new bio-fuels movement (aka turning ones food crops into fuel for your car). Think of it this way. If ones purchasing power is diminished due to central banks creating money our of thin air, do you:

A. Keep your money in a depreciating currency and watch your purchasing power erode?

B. Buy tangleable goods such as food staples knowing tomorrow they are going to cost you more?

Bottom line, until there is fiscal discipline on a Federal level (we in America are driving the global inflation rate being our currency is currently the World's currency), expect food prices to continue moving higher along with all other commodities. Inflation (the expansion of the money supply via bank bailouts, excessive lending, and a society that is based on borrowing and not savings) is a self perpetuating beast that left uncheck will destroy a currency completely.

T. Boone Pickens Holdings Down Nearly 20% This Quarter

The only fools in this commodities market are those who try to buy and sell in and out of it. If you can't ride the bull you will get trampled. Go long, hang on tight and prepare for the ride of your life.

T. Boone Pickens Holdings Down Nearly 20% This Quarter

Within a larger bull market in commodities, one can expect corrections to be dramatic. On the other side of that coin, when they take off, expect it to be breath taking.

That's just the way it is. Get use to it.

Why I Am Cutting Back on Commodities

You are crazy to sell off commodities at this point. Fundamentally we are at the end of cheap food, energy, and materials. China, India, and the Middle East, half the world's population, is industrializing and putting huge demands on everything we now take for granted in the US. This in no longer an American market picture. If you treat it as that, you will surely miss out on cheap prices and what is to be the largest bull market in commodities in history.

Will there be volatility? For sure. You need to see past quarterly returns and look at the larger long term picture. With oil heading well north of $100 a barrel and food prices soaring while shortages are beginning to emerge, you can bet we will see higher prices in the long run until we decide to "renegotiate" our current standards of living to accommodate a world with less to give.