Ring In the New Year as the Commodity Boom Continues!
Oil prices, metals and the agriculture started the year on a tear. Gold has rallied $40 an ounce since Dec 31, while oil topped $100 this week in historic fashion. Wheat prices gained over 8% and corn prices are approaching the $5 per bushel mark.
Meanwhile, soybeans -- driven by demand for biodiesal, livestock feed and tumultuous weather patterns across the major growing regions -- are entering price areas not seen since the last bull market in 1988.
Inflation on the Rise
This is inflation, folks, and today’s Wall Street Journal highlights it in an article titled “Fed’s Inflation Fears Might Trump Calls for Another Big Rate Cut.” One thing we know from previous inflationary cycles is that once inflation gets a grip in the psyche it is most difficult to root out.
The themes for 2008 are emerging right before our eyes. Higher commodity prices, slower economic growth, lower interest rates and a volatile stock market… which all spell opportunity for us with a capital “O.”
Couple this with ongoing turmoil in places like Nigeria and Pakistan and we have a classic “retreat from risk” as investors pour into the asset classes that have less to do with the economy and more to do with inflationary hedges.
Bottom line: The place to have our money going forward is the natural resource sector – and, more importantly, the countries that produce them.
High demand for metals, food and oil will continue into 2008. Even some of the lesser-known commodities, such as coffee, cotton and sugar, will also have substantial price gains. And with the introduction of exchange-traded funds (ETFs) and exchange-traded notes (ETNs), there will be ample opportunities to invest in the commodity sector through the stock market.
As I mentioned earlier, I have been trading the natural resource sector since 1978.The high prices we saw in the 1970s will not compare with this bull market. The confluence of major fundamental bullish factors is astounding, and in some areas it has only just begun.
$3,000 Gold Prices on the Horizon
2008 is starting off right in the direction we are focused on, and we will navigate the markets to keep you in the right stocks and ETFs to take advantage of this enormous macro-trend.
In 2007, we saw the cash-rich sovereign wealth funds buying up the financial stocks such as Citibank, Bear Stearns, Merrill Lynch and Morgan Stanley. However, our strong belief is that they will be turning their cash infusions to natural resources as both an investment and to secure commodities for their own growing populations.
As Mark Faber of the Gloom, Boom& Doom Report says the gold bull market will come to an end when the SWFs become “sick and tired of their investments in financial stocks and will finally purchase gold -- probably at above $3,000 per ounce.”
Oil prices, metals and the agriculture started the year on a tear. Gold has rallied $40 an ounce since Dec 31, while oil topped $100 this week in historic fashion. Wheat prices gained over 8% and corn prices are approaching the $5 per bushel mark.
Meanwhile, soybeans -- driven by demand for biodiesal, livestock feed and tumultuous weather patterns across the major growing regions -- are entering price areas not seen since the last bull market in 1988.
Inflation on the Rise
This is inflation, folks, and today’s Wall Street Journal highlights it in an article titled “Fed’s Inflation Fears Might Trump Calls for Another Big Rate Cut.” One thing we know from previous inflationary cycles is that once inflation gets a grip in the psyche it is most difficult to root out.
The themes for 2008 are emerging right before our eyes. Higher commodity prices, slower economic growth, lower interest rates and a volatile stock market… which all spell opportunity for us with a capital “O.”
Couple this with ongoing turmoil in places like Nigeria and Pakistan and we have a classic “retreat from risk” as investors pour into the asset classes that have less to do with the economy and more to do with inflationary hedges.
Bottom line: The place to have our money going forward is the natural resource sector – and, more importantly, the countries that produce them.
High demand for metals, food and oil will continue into 2008. Even some of the lesser-known commodities, such as coffee, cotton and sugar, will also have substantial price gains. And with the introduction of exchange-traded funds (ETFs) and exchange-traded notes (ETNs), there will be ample opportunities to invest in the commodity sector through the stock market.
As I mentioned earlier, I have been trading the natural resource sector since 1978.The high prices we saw in the 1970s will not compare with this bull market. The confluence of major fundamental bullish factors is astounding, and in some areas it has only just begun.
$3,000 Gold Prices on the Horizon
2008 is starting off right in the direction we are focused on, and we will navigate the markets to keep you in the right stocks and ETFs to take advantage of this enormous macro-trend.
In 2007, we saw the cash-rich sovereign wealth funds buying up the financial stocks such as Citibank, Bear Stearns, Merrill Lynch and Morgan Stanley. However, our strong belief is that they will be turning their cash infusions to natural resources as both an investment and to secure commodities for their own growing populations.
As Mark Faber of the Gloom, Boom& Doom Report says the gold bull market will come to an end when the SWFs become “sick and tired of their investments in financial stocks and will finally purchase gold -- probably at above $3,000 per ounce.”
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