Now, I disagree. . .I think short term, commodities may correct (my silver is down today on the news of a rising dollar and exit from oil). In fact, if there's an American recession (when), commodity prices will drop. It's long term that I think it's inevitable that commodities do well.
I subscribe to a simple economic theory:
It's about the oil, baby.
If you want to read one thing per day to gauge our economic health, don't look at the Dow, the S&P 500, the NASDAQ. . .just look at the price of oil.
That's all you need to know.
Every economic expansion in our country was dependent on one thing and one thing only - cheap oil. Not technology, not the internet invented by Al Gore, not Reaganomics.
Cheap oil.
To get copper, silver, grain, you need equipment to mine it or farm it. And that equipment operates on energy (not to mention fertilizer is petroleum-based). You need energy. . .and that means oirl. So, to produce these crops and other commodities, you are going to naturally need more energy, which means higher prices.
I don't see how we can escape other than alternative energy and we just haven't cared up til this year about it as a country. We have had an oil President and Vice-President and that's all we know as a country and really, as a world, with a few exceptions.
Couple this with the fact that America has a fiat currency. . .well. . .long term, I think commodities are not a bust.
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