bigmoney

Will Commodity ETFs Really Go Up?

>> To me this looks like a closed-loop game, whereby you get a price increase, but not a purchasing power increase.

from a macro-economics perspective, if commodities rise that's not necessarily inflationary if other asset classes continue to decline. If Joe the Plumber has to pay $5/gallon of gas, that leaves him less money to bid up the price of housing, stocks, college educations, etc. Chances are, his boss isn't going to give him a fat pay raise to boost his purchasing power. Maybe the government will give him money.

Either way, I imagine commodities could rise in a supply constraint, what they call cost-push inflation, I believe.

Alternatives to Buy and Hold (Part II)

I like this approach, as it captures whatever sector is trending up for whatever reason, whether that be inflation, economic growth, or just irrational exuberance. I think these approaches have potential because many people will buy & hold, or move to cash and stay in cash.

I know people that are nearly 100% stocks, buy & hold fashion, and they stubbornly refuse to consider alternatives. They "dollar cost average". The current market sag is nerve-wracking, because many of the same macro-economic issues persist, with zombie banks, quasi-nationalization, etc. I'd say its quite possible to trend down from todays 6590 another -30%, and then trade sideways, while inflation does it thing. And in the not too distant future, large numbers of baby-boomers will be hoping to retire, or else "right-sized", and unable to secure quality employment.

Book Review: Addison Wiggin's 'The Demise of the Dollar'

I am a big fan of dailyreckoning, esp. Bill Bonner's wry wit. I bought the book above some time back, and found it to be dry. But I am layman. Also, I don't know about the buy gold prescription. People touting this tend to have libertarian politics coloring their world view. The theory is good, but why gold instead of some other industrial commodity such as coal, phosphate, or oil? And how to possess gold in any quantity? There is GLD ETF, which is fine for small scale diversification, but paper gold makes me a little nervous. Many people got whacked in the 1930's holding gold "certificates". And I certainly don't want to be driving down the road with 50% of my net worth in physical bullion in the back seat.

Commodities ETFs: The Time Is Not Yet Ripe

I recently purchased some energy / materials stock ETFs, to diversify some of my cash, as an inflation hedge.

Commodities: Future ETFs Worth Investing In

I think its worth monitoring these commodity ETFs. Even with chronic asset deflation, some market sectors can easily inflate. Oil (the premier fossil fuel) is a good candidate because its getting increasing expensive to dig out of the ground, and since energy consumption is tied to "the good life", it seems reasonable that the world will always be striving to consume more and more.

Stocks vs. Commodities: Which is a Better Investment?

I am not sure why this is. Maybe owners of capital have more leverage than owners of commodities, geo-politically speaking.