Commodities Are The Best Place To Be For The Next Decade

Anand04 · 11-19-2009, 09:49 AM

Why invest in commodities? Two and a half billion people are going to live like Americans in the next 20 years and prices go up over time, that’s the nature of inflation.
We are in the middle of a global economic crisis and commodities are on sale. Buy commodities now while they are still cheap. When we finally emerge from this global economic crisis -- prices will explode higher. I’m talking about another long-term bull market in commodities. Let me explain…
Inflation Will Push Commodities Prices Higher
Federal Reserve Chairman Ben Bernanke is an inflationist, which is an advocate of the policy of deliberate inflation achieved by increasing the supply of available currency and credit. They call him helicopter Ben because he once quoted a statement made by Milton Friedman, about using a "helicopter drop" of money into the economy to fight deflation.
Bernanke is a student of the causes of the Great Depression, and he has written extensively on this subject. Bernanke knows that deflation is quite negative for an economy and should be avoided at all costs. We have recently seen deflation as prices for real estate and commodities dropped during this recession. But, Ben Bernanke’s Fed and other central banks around the world have fired up the printing presses to combat deflation. They have been dumping new currency into the economy to reverse deflation and stimulate the economy. It’s working! One measure of inflation- the Consumer Price Index (CPI) has recently turned positive. Deflation is out—Inflation is starting.
The problem is, inflation could really skyrocket, especially when we finally emerge from this recession. Inflation eats away at your purchasing power and takes away your wealth.
One of the best ways to protect against inflation is to invest in commodities.
In the 1970s, when inflation in the U.S. was high and the economy was in a deep recession, commodity prices soared.
You want to own tangible assets like metals, energy, agriculture, and livestock as these commodities hold their value in inflationary times

forexer · 11-19-2009, 09:57 AM

Quote:

Originally Posted by Anand04

Why invest in commodities? Two and a half billion people are going to live like Americans in the next 20 years and prices go up over time, that’s the nature of inflation.
We are in the middle of a global economic crisis and commodities are on sale. Buy commodities now while they are still cheap. When we finally emerge from this global economic crisis -- prices will explode higher. I’m talking about another long-term bull market in commodities. Let me explain…
Inflation Will Push Commodities Prices Higher
Federal Reserve Chairman Ben Bernanke is an inflationist, which is an advocate of the policy of deliberate inflation achieved by increasing the supply of available currency and credit. They call him helicopter Ben because he once quoted a statement made by Milton Friedman, about using a "helicopter drop" of money into the economy to fight deflation.
Bernanke is a student of the causes of the Great Depression, and he has written extensively on this subject. Bernanke knows that deflation is quite negative for an economy and should be avoided at all costs. We have recently seen deflation as prices for real estate and commodities dropped during this recession. But, Ben Bernanke’s Fed and other central banks around the world have fired up the printing presses to combat deflation. They have been dumping new currency into the economy to reverse deflation and stimulate the economy. It’s working! One measure of inflation- the Consumer Price Index (CPI) has recently turned positive. Deflation is out—Inflation is starting.
The problem is, inflation could really skyrocket, especially when we finally emerge from this recession. Inflation eats away at your purchasing power and takes away your wealth.
One of the best ways to protect against inflation is to invest in commodities.
In the 1970s, when inflation in the U.S. was high and the economy was in a deep recession, commodity prices soared.
You want to own tangible assets like metals, energy, agriculture, and livestock as these commodities hold their value in inflationary times

Hi,

Investing in gold is my top priority now. I don't know which should i use. ETFs, bullion - physical or stored, futures, or even spot gold.

Silver is also another metal i'm eying because it's very like gold - properties and so on. One thing to bear in mind is the commissions they charge if i buy gold any gold. Here in singapore, i need to pay tax of 7% of the (price X Quantity) of the gold i buy (physical gold bullion). Tax is 7% that means if i buy about 3kSGD of gold, thats almost 300SGD out from my pockets. Its really seems uneasy to buy gold at such a "high" price. Every thing including price is relative... so at an all time high, it doesn';t seem right to buy now. Rhen again if i wait for a correction-that miht or might not happen, i risk missing out more.

The main purpose of investing in gold is not to profit from capital gains but to protect against inflation. A well constructed portfolio will easily weather through inflationary phases that will come like a fire storm and eat away wealth.

What's your take on this?

Forexer

Tekmnd · 11-19-2009, 10:00 AM

Hi there

I like commodities for the long term as well.
In my 'buy and hold account' (my 401K), I have lots of commodities-

Food staples
Some energy
Some metals
Natural Gas

Cheers
Tek

mattman · 11-19-2009, 10:28 AM

I agree commodities are a good long term hedge. I have traded spot silver, Australian Dollar for gold exposure; I haven't bought bullion yet. It is something I am looking into, and bullion silver is on my Christmas list.

gb41wd · 11-19-2009, 07:08 PM

Hi,

The book, "The IVY league portfolio" is an interesting read and discusses the success of the Yale and Harvard endowments which have averaged about 16% per year. The author advocates investing 20% of your portfolio in commodities. History would support that a diversified portfolio would provide higher risk-adjusted returns than being overly committed to the highly volatile commodities trade.
Also, the government economists big arguement in leaving the interest rate low is that prices have fallen over the past year despite the short-term rise over the last 3-months. High unemployment and low factory capacity rates are deflationary and are offsetting the printed money. Obviously, the markets dissagree.
As far as gold, I'm reminded that Buffet keeps saying, "be fearful when others are greedy and greedy when others are fearfull". Could that apply to gold at the current record prices. Everyone was gangbusters on real-estate before the bubble popped. - gb

forexer · 11-19-2009, 07:59 PM

Quote:

Originally Posted by gb41wd

Hi,

"be fearful when others are greedy and greedy when others are fearfull".

Thanks, just what i needed!

Forexer

uahmed · 11-19-2009, 11:22 PM

I recently just bought a commodity etf and my reasons for liking commodities are the same as Anand04 noted.

JeffShepherd · 11-20-2009, 01:43 PM

Tek,

You say you hold natural gas, everytime I look at that it falls but it has recently broken out of its recent down trend although it hasn't risen (it is now lower). I notice natural gas has hit a support level and when it hit the same level in early September it rose by 50%.

Putting my 'absolute novice investors' hat on, is it safe to assume the price will very shortly rise?

11-19-2009, 09:49 AM	#1 (permalink)
Anand04 Badges About Assets Join Date: Nov 2009 Location: Mumbai India & London England Posts: 16 InformedPoints: 99.50	Commodities Are The Best Place To Be For The Next Decade Why invest in commodities? Two and a half billion people are going to live like Americans in the next 20 years and prices go up over time, that’s the nature of inflation. We are in the middle of a global economic crisis and commodities are on sale. Buy commodities now while they are still cheap. When we finally emerge from this global economic crisis -- prices will explode higher. I’m talking about another long-term bull market in commodities. Let me explain… Inflation Will Push Commodities Prices Higher Federal Reserve Chairman Ben Bernanke is an inflationist, which is an advocate of the policy of deliberate inflation achieved by increasing the supply of available currency and credit. They call him helicopter Ben because he once quoted a statement made by Milton Friedman, about using a "helicopter drop" of money into the economy to fight deflation. Bernanke is a student of the causes of the Great Depression, and he has written extensively on this subject. Bernanke knows that deflation is quite negative for an economy and should be avoided at all costs. We have recently seen deflation as prices for real estate and commodities dropped during this recession. But, Ben Bernanke’s Fed and other central banks around the world have fired up the printing presses to combat deflation. They have been dumping new currency into the economy to reverse deflation and stimulate the economy. It’s working! One measure of inflation- the Consumer Price Index (CPI) has recently turned positive. Deflation is out—Inflation is starting. The problem is, inflation could really skyrocket, especially when we finally emerge from this recession. Inflation eats away at your purchasing power and takes away your wealth. One of the best ways to protect against inflation is to invest in commodities. In the 1970s, when inflation in the U.S. was high and the economy was in a deep recession, commodity prices soared. You want to own tangible assets like metals, energy, agriculture, and livestock as these commodities hold their value in inflationary times Share This \| Last edited by Simit Patel; 11-19-2009 at 10:16 AM.

11-19-2009, 07:08 PM	#5 (permalink)
gb41wd Badges About Assets Join Date: Dec 2008 Posts: 161 InformedPoints: 200.00	IVY league portfolio Hi, The book, "The IVY league portfolio" is an interesting read and discusses the success of the Yale and Harvard endowments which have averaged about 16% per year. The author advocates investing 20% of your portfolio in commodities. History would support that a diversified portfolio would provide higher risk-adjusted returns than being overly committed to the highly volatile commodities trade. Also, the government economists big arguement in leaving the interest rate low is that prices have fallen over the past year despite the short-term rise over the last 3-months. High unemployment and low factory capacity rates are deflationary and are offsetting the printed money. Obviously, the markets dissagree. As far as gold, I'm reminded that Buffet keeps saying, "be fearful when others are greedy and greedy when others are fearfull". Could that apply to gold at the current record prices. Everyone was gangbusters on real-estate before the bubble popped. - gb

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11-19-2009, 10:00 AM	#3 (permalink)
Tekmnd Community Co-Host Badges About Assets Badges Showcase Total Awards: 3 Join Date: Aug 2008 Location: San Diego Posts: 2,229 InformedPoints: 12,963.18 Funds	Hi there I like commodities for the long term as well. In my 'buy and hold account' (my 401K), I have lots of commodities- Food staples Some energy Some metals Natural Gas Cheers Tek

11-19-2009, 10:28 AM	#4 (permalink)
mattman Badges About Assets Join Date: Nov 2008 Location: South Korea Posts: 206 InformedPoints: 0	I agree commodities are a good long term hedge. I have traded spot silver, Australian Dollar for gold exposure; I haven't bought bullion yet. It is something I am looking into, and bullion silver is on my Christmas list.

11-19-2009, 11:22 PM	#7 (permalink)
uahmed Badges About Assets Join Date: Jul 2008 Location: Chicago, IL Posts: 284 InformedPoints: 50.03	I recently just bought a commodity etf and my reasons for liking commodities are the same as Anand04 noted.

11-20-2009, 01:43 PM	#8 (permalink)
JeffShepherd Badges About Assets Join Date: Jul 2009 Posts: 69 InformedPoints: 0	Tek, You say you hold natural gas, everytime I look at that it falls but it has recently broken out of its recent down trend although it hasn't risen (it is now lower). I notice natural gas has hit a support level and when it hit the same level in early September it rose by 50%. Putting my 'absolute novice investors' hat on, is it safe to assume the price will very shortly rise?