SD CDL

Why I Don't Own Commodities

Mark in SF,
Agree 100% that supply/demand is pushing it up but I think it is also the double whammy with accelerating M3 growth worldwide. Matt Simmon's "Twilight in the Desert" was a great book on the subject. So was "The Long Emergency" by John Knustler if you want to get a little more on the darker side.

Why I Don't Own Commodities

One item the writer and stockdude is ignoring is the MASSIVE amounts of INFLATION worldwide. M3 growth across the globe in major industrial countries are in the teens on the LOW side. Central banks around the world are pumping large amounts of cash which is why you have commodities rising vs. all currencies. It is not a 2 year cycle.

Stockdude's point about exploration is true in as much as they are looking for resources but NOT finding them. The Petrobas find is deep beneath the ocean and will require expensive if not undevelopled technology. Much pricier than the stick-a-straw-in-the-g... Saudi oil. The Canadian oils sands are a mining operation with a bpd of maybe 2-3 million max...the global demand will eat through that in a year.

We've had barely a handful of major oil field discoveries since the 60's and a vast majority of producing countries are in decline. The 21st century will be defined by the quest for resources, you have already witnessed it with two wars in Iraq.

Ignore commodities at your own risk.