There seems to be a lot evidence mounting that the Fed’s attempt at reflation is not working and that the market is overwhelming it with deflationary pressure. I tend to agree. And we’re going into a global recession.
It looks a lot like demand destruction all around. Having said this, certain sectors of commodities are hard to reduce and/or subsitute. Like oil and food.( I noticed lately that both Rogers and Faber have been talking about food.) The CRB did extremely well in the 1970’s. We had inflation and a recession then. Stagflation. The CRB cranked up from 1971 to 1975 went sideways for a year and then went strongly up again to 1980.
I also agree that there’s a lot of cash looking for a home right now and Commodities may be the only logical choice when some of the noise dies down. Certainly, nothing else looks even remotely as bullish.
Thus, I am begining to think it’s a timing issue to get back into commodities at this point. They’ll do well in a recession and better in inflation. I hope!!