I have emphasised a number of times here that commodities are largely driven by supply and demand. All these talks of speculators driving up the price of Crude in the media and by mainstream economists are, in my view, a shed load of craps. The level of institutional blindness in this never stops to amaze me.
Personally, I believe governments' measures to fire fight the food crisis will not work in the long run. Prices in the agricultural commodities too will have to go up. We will be looking to take a position in Rough Rice, alongside the position we recently took in Soybeans.
As with Gold, we continue to believe that the price of Gold will reflect the investment demand in the inflationary environment we are in as investors come to the realisation that central banks simply do not have the will to fight inflation. They talk hawkishly but continue to crank up their printing presses at full tilt -- they are embracing it instead of fighting it! However, we do not believe the hyperinflationary scenario as described by John Williams will happen. I will write more about this in the future.
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2 comments:
Boone Picken specialises in O and G. Now looking at alternative enerygy source to invest in. Does this mean we gonna run out of Oil soon. I hear our Malaysian petrol pump oil is gonna go to RM4/litre. Can afford a car but cannot afford to drive it.
Mr.Pickens is specifically worried about america's energy consumption going forward, so he is looking at viable alternatives and hoping, of course to profit from it.
Oil is not going to run out but will get more expensive as supply woes hit main street.
Malaysian petrol will be RM2.70/litre this year, and i won't rule out an increase again next year.
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