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

To: sea_biscuit who wrote (94315)	5/16/2008 2:53:10 AM
From: arun gera	Read Replies (1) \| Respond to of 110194

>Show me the warehouses filled with rice, corn and wheat.> So there is a short term inflation and maybe a crash in prices as buyers substitute products or lower demand and suppliers overproduce. >Show me the new oil discoveries that are coming online to replace the declining "elephant" oil fields.> Faced with higher oil prices, the world over people will cut usage. Let us say the usage declines by 5 percent over the world, you suddenly have 4 million barrels per day extra capacity, more than the daily consumption of the whole of India. >Show me the zinc, copper, silver and gold mines that are mining metals by the millions of tons, ounces or grams as the case may be. Then, I will agree with you that we are in a commodities bubble that will burst.> No idea about these metals. -Arun

To: sea_biscuit who wrote (94315)	5/16/2008 9:52:57 AM
From: dybdahl	Read Replies (2) \| Respond to of 110194

Food production and delivery has been optimized for many years in ways that reduce storage etc. This means that a small rise in consumption will produce shortage in many places. However, the world has enough food - the problem is not the amount, but the price. When the price is adjusted, there will be no shortage, it will just be too expensive. In order to get the price down, production must rise or consumption must be reduced. There is still room for production improvements, and consumption reduction can happen in several ways. I fully agree with you, that it's not a bubble - but it may be temporary.