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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: justwhatuwant who wrote (12392)	4/21/2004 9:00:03 PM
From: Square_Dealings	Respond to of 110194

These commodities are all going through the roof because the Fed can't raise interest rates. Of course Greenspan isnt worried about deflation because he knows he's stuck dropping money out of helicopters. The Fed already made their decision to inflate and I dont think they can turn back now without total collapse of the system. The criminals are now using the threat of a meager interest rate hike to crash commodities for the moment. M p.s. gold is a currency

To: justwhatuwant who wrote (12392)	4/21/2004 9:26:26 PM
From: russwinter	Read Replies (1) \| Respond to of 110194

<speculative commodities > There's more to this commodity move than speculation, although undeniably specs are at times a big factor as the marginal buyer (or seller now). By my thinking about 75% of pricing in most commodities (varies) is now due to shortages, and low stocks/inventories. That will take years to correct, or alternatively a sudden bust or Train Wreck would do it. A "slowdown" will do little IMO. I think speculators or hedge funds contribute 15% as a factor or influence to pricing, but another 10% influence are what I would call crack-up boom players, looking for a store of real value: flucht in die sachwerte. For instance, I just traded copper as a raw spec, in and out, but the next time in, might be more permanent as a store of value against a crack-up boom. As a crack-up boom player I may only come out of copper, gold or silver if the alternative: USD cash, offers me a safe, real inflation adjusted return. Call that "Far Side" if you want, but I'll bet more and more people would rather hold gold, or copper, or corn, than US Dollars paying one percent. And "talk" of a 25 bps rate hike (* later) will only give them (crack up boom insurers, as opposed to hedge funds) momentary pause, and in this case a great buying opportunity. (*)I think the Fed raises rates 25 bps in June and another 25 in August, and that would not take me out of a commodity play, by itself. They may very well go 75 bps by August or Sept, and it wouldn't even put a dent in this commodity bull market. A 100 might slightly dent it, only 150 or more by Sept would slow it down measurably ,and even then I'm not so sure