Commodities Mini-Bubble?

Discussion in 'Economics' started by ShoeshineBoy, Jul 15, 2008.

  1. I know that commodities tend to run in long bull markets of, say, twenty years. And I know that global demand seems to be increasing for infrastructure and the underlying raw materials. But isn't a bubble a bubble? Haven't we learned that much from history, TA and so on?

    When you look at some of the charts, it just doesn't seem justified, wouldn't you agree? Yes, there should be a run-up but so drastically??

    I'm starting to wonder if all the over-inflated money supplies that have been poured into America, Asia, Russia and some emerging markets has been for the last five years pouring into commodities. Of course, a ton of it, over-inflated money that is, poured into American real estate and was a root cause of the subprime crisis. 2/3 of our economy is consumer and the typical consumer is going to pour money into his house.

    But what about all that money created by foreign governments? Where is that going to go? Well, there is much more disparity in these economies between rich and pour. Isn't it reasonable to assume, though I've never seen it reported, that foreign money would tend to be invested in hard goods? And, if so, wouldn't all that extra money sloshing around make a mini-bubble of commodities?

    Isn't it possible that, while we're obviously in a long term bull on commodities, that some of this is significantly overinflated?