There is not a long term bull market in commodities. If you just look at monthly charts in commodities what you will find is that big runs both up and down get fully retraced, more like an EKG look that say a chart of the Dow since 1900. The commodity index funds being wonderfully misclassified by our good friends in the US Government and the CFTC is what allowed Large Speculators to bid the price of many of them up last year without the normal position size limits that have historically been there for speculators.

Only commercials are allowed unlimited position size because they are hedgers. When they allowed these funds last year to open accounts at GS as commercials, it essentially gave them the ability to use insane leverage to bid the prices up. This is why those of us who knew this was happening were calling the Crude $200 calls ridiculous, because we knew at some point when even the slightest retracement happened, it was going to be a race to the exits.

Now that Congress the worlds savior has had hearings and decried, well if we only knew this etc… Of course they did all along. An acquaintance of mine told them of this 3 years ago and was laughed out of their chamber.

Net, we will have volatility as we have seen, but there is not a long term uptrend. Rogers has made more money than I ever will, and I cannot represent that I am a better trader than he is. However, this is what I know to be true. I do not know where he gets his take on this. Don’t bet the farm on this.