Growing Inflation In Commodity Prices?
So many economists and government officials are claiming inflation is dead. These are probably the same people that did not see the Great Recession coming. The fact is everyone has an opinion, however everyone is only entitled to the facts. The facts that are evident are multi fold.
1. Global demand is increasing in the commodity markets
2. Droughts & Floods are reaching historic precedents
3. Tremendous amounts of debt stand the possibility to cause debt deflation which leads to inflation.
4. Some commodity prices are already moving up rapidly
The above is not my imagination but we see the reality unfolding under our eyes. The current sugar crop is vastly diminished due to droughts and floods from India to Brazil. Global demand in Sugar exceeds output by as much as 5 million metric tons in the year through September 2010 according to reports. In other words there is a shortfall in the magnitude of a two year supply.
According to the commodity bull Jim Rogers, he believes sugar is going to go much, much higher during the course of the bull market in the commodity arena. Jim Rogers, chairman of Rogers Holdings, said in an Aug. 6 interview in Singapore. “Sugar is still 70 percent below its all-time high and not many things in life are 70 percent below what they were in 1974. Sugar has a wonderful future.”
Putting it another way 40 years ago sugar rose 16 times over five years and reached a record 66 cents in November 1974. Can you imagine how much money was made for trend following commodity trading advisors and their clients? Easy answer, fortunes.. Think a little further just this year Crude fell to a low in the high $30 dollar range currently Crude is at the $70 dollar threshold. It is very obvious there is some inflationary movement. The reality seems evident that commodity prices are set for some major moves not seen in decades. Time will tell but as a trend follower we do not need to know the future but have an exact plan how to take advantage of the situation when and if it presents itself.
Andrew Abraham
www.myinvestorsplace.com
Futures trading involves risk. People can and do lose money
My name in Andrew Abraham. I have been investing in commodities and managed futures since 1994. I am a commodity trading advisor/co manager of a commodity pool who adheres to the philosophy of trend following. Trend following stresses a disciplined approach to commodity/ futures trading. Successful trend following and commodity futures investing requires patience, discipline and actively managing the risk. What sets us apart from other Commodity trading advisors and commodity pools is that we are not only concerned about the return on investment but how much risk you will have to tolerate to achieve your goals
Article Source:http://www.articlesbase.com/investing-articles/growing-inflation-in-commodity-prices-1113264.html
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