All Posts Tagged With: "commodities bubble"
What Commodities Bubble?
Although it’s tempting to describe sky-high commodities prices as being the latest ‘bubble’ to hit the markets, for commodities such as crude oil and corn, basic supply and demand may be pushing up prices. This from The Wall Street Journal:
Prices, to be sure, are soaring — crude oil fetched $132.19 a barrel in New York on Friday, up 103% from $64.97 a year earlier. Yet crude has posted similarly massive increases a number of times in the past three decades. Most notably, in the spring of 1980, as gasoline lines lengthened, the price of crude oil was 150% above the year-before level.
There Is No Commodities Bubble Say Economists
There is no commodities bubble, at least according to the majority of economists surveyed by The Wall Street Journal.
This from the WSJ:
Fifty-one percent of the respondents said demand from China and India was the prime factor in soaring energy prices, and 40% said demand was the chief contributor to rising food costs. Constrained supply was cited second most-often; 20% blamed supply problems for higher food prices and 15% for increasing energy prices.
“It’s a combination of demand and supply issues,” said Joseph Carson of AllianceBernstein.
“Soft commodities are now the best-performing sub-set of the commodity bull market,” says Eric Roseman in the Offshore A-Letter.
“The world’s supply is withering. The demand for these precious commodities is booming in emerging markets, while the world’s crop yields are plunging, trade restrictions are suppressing supplies and the bio-fuel craze is stealing crops for energy, rather than food.
Read on to find out about the blizzard of commodities ETFs launched over the last 12 months. These new ETFs allow both individual and institutional investors access to hot commodities like coffee, wheat, sugar and corn, to name only a few.
Poverty Time Bomb
The papers have kept us in stitches today…a ‘Gas Tax Holiday’? Really? Waiting for the showdown between Hillary and Obama…the Fed has created bubble-like conditions in the commodities markets - but Kevin Kerr tells us all is not lost. Buffett tells it like it is…the art world’s big test…and more!
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