tag:blogger.com,1999:blog-6616959642391988608.post6455612889400892032..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: The commodity V-boomScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger23125tag:blogger.com,1999:blog-6616959642391988608.post-55356219134979012010-04-08T04:42:11.940-07:002010-04-08T04:42:11.940-07:00Oh and by the way--gold does earn rent--you lend i...Oh and by the way--gold does earn rent--you lend it out.Steve Fultonhttps://www.blogger.com/profile/06008750322512502848noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-69548816434401875732010-04-07T21:15:37.456-07:002010-04-07T21:15:37.456-07:00BTW, I enjoy everyone's perspectives here.
S...BTW, I enjoy everyone's perspectives here. <br /><br />Sugar is half off its peak.<br />Eucalyptus going okay, but not great guns (paper pulp).<br />Natural gas so-so. <br />Housing soft as quicksand. Commercial space maybe worse. Wages dead. Cost of manufactured goods (except military hardware) going down, not up. Worker productivity rising nicely. <br /><br />In the long-run, I suspect Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-34207716761998029352010-04-07T20:23:05.751-07:002010-04-07T20:23:05.751-07:00j: re the Dallas Fed's trimmed mean measure of...j: re the Dallas Fed's trimmed mean measure of inflation. The thing to keep in mind always is that the last place to look for signs of inflation is in the official measures of inflation. Once it shows up in the CPI or the PCE deflator, it's too late from an investor's perspective. It's much better to follow the sensitive, market-based, leading indicators of inflation, and Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-88874124714083736522010-04-07T20:18:34.995-07:002010-04-07T20:18:34.995-07:00puffer: Agricultural products would be the last se...puffer: Agricultural products would be the last sector of the commodity markets to experience rising prices as a result of a monetary inflation. If an investors senses that his central bank is pursuing an inflationary monetary policy, the most rational reaction is to protect himself by a) reducing his exposure to cash (e.g. borrow more), b) increasing his exposure to tangible assets that maintainScott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-10791053090920450362010-04-07T20:04:42.139-07:002010-04-07T20:04:42.139-07:00Steve makes an excellent point. When the price of ...Steve makes an excellent point. When the price of things goes up in dollar terms (like commodities), that is a direct reflection of the dollar's loss of value. Inflation is essential the process whereby a currency loses it value or purchasing power. You ignore the message of gold and commodity prices at your peril.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-49419296847036098632010-04-07T18:18:41.155-07:002010-04-07T18:18:41.155-07:00Benjamin--you can dismiss Gold if you like but it&...Benjamin--you can dismiss Gold if you like but it's difficult to dismiss the CRB raw industrial commodities index. I assure you there is no bubble in tallow, burlap, scrap lead, hides or wool tops. Yet that index which hit a high of about 540 in late 2007 and a low of 315 in Dec '08 looks poised to break above 510. Surely that represents two things: 1. A stronger global economy and 2. A Steve Fultonhttps://www.blogger.com/profile/06008750322512502848noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-31749744009019326912010-04-07T15:02:15.204-07:002010-04-07T15:02:15.204-07:00Last post here for the day.
I mentioned my own s...Last post here for the day. <br /><br />I mentioned my own shop. I am NOT a paid financial advisor, nor do I seek to be. I read and post here for my own enjoyment. I think Scott Grannis provides a very underappreciated service. I throughly enjoy the site and hope to have the privilege of hanging around for awhile. Just sayin. <br /><br />Nite, ya'llJohnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-64174593946962345742010-04-07T14:54:13.317-07:002010-04-07T14:54:13.317-07:00Scott,
Recently saw a report that discussed the D...Scott,<br />Recently saw a report that discussed the Dallas Fed trimmed-mean PCE index, a statistically based measure of core inflation that eliminates most extreme price movements in each month. It has been running at +1.0% over the last year and +.6% (annualized) over the last 3 months. I'd appreciate your thoughts on this inflation measure, I have my doubts about a index that drops jjhttps://www.blogger.com/profile/00382970468577051096noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-15644389895441705672010-04-07T14:52:37.704-07:002010-04-07T14:52:37.704-07:00John-
Well...how about the huge recovery in Asian...John-<br /><br />Well...how about the huge recovery in Asian economies, that preceded our own so-so recovery (which I hope gathers steam)?<br /><br />Are they pulling us out, or we them? Have their monetary authorities acted to prompt growth? And that is helping pull us out? After all, the Far East has a bigger econmoy than we do. Should we have been watching China monetary authorities for a Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-24732229183457333092010-04-07T14:19:29.179-07:002010-04-07T14:19:29.179-07:00Hi Benj,
I do not doubt that as time marches on ...Hi Benj, <br /><br />I do not doubt that as time marches on the monetary policies of other nations will play a larger role in global economics. Its just that I can't swallow the notion that its going to happen in my lifetime (that may not be so far off!) Many countries are following a different monetary policy as we discuss this - Ausrtralia and Brazil for instance - but their economies are Johnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-21529842889386122602010-04-07T13:58:15.868-07:002010-04-07T13:58:15.868-07:00John
Well, maybe I was shooting my mouth off a li...John<br /><br />Well, maybe I was shooting my mouth off a little bit with "Forget the Fed."<br /><br />But, it is inevitable that the Fed's influence will continue to wane in years ahead, as we enter a more-globalized economy with free cross-border flows of capital and cash.<br /><br />Decisions made by Chinese monetary authorities may become more important than the Fed (inevitably,Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-31082280068182065932010-04-07T13:55:23.915-07:002010-04-07T13:55:23.915-07:00Puffer,
Not trying to speak for Scott, but it loo...Puffer,<br /><br />Not trying to speak for Scott, but it looks to me like the index he is showing includes a mixture of softs, hards, and energies. Apparantly the commodities that are moving the index are the hards, or industrial commodities like copper, and energies, like oil. Every commodity is not moving up sharply: ags and natty gas for instance. <br /><br />hope this helps.Johnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-15757775439897158462010-04-07T13:17:51.884-07:002010-04-07T13:17:51.884-07:00Scott -
Why is agriculture not participating in t...Scott -<br /><br />Why is agriculture not participating in the overall rally for commodities? Take a look at a chart of DBA or RJA for example...pufferhttps://www.blogger.com/profile/17799406540179163330noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-3321351690668240482010-04-07T13:04:48.081-07:002010-04-07T13:04:48.081-07:00maybe krugman was right; we need a bubble.maybe krugman was right; we need a bubble.septizoniomhttps://www.blogger.com/profile/14253705209662419429noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-22708605918447675762010-04-07T12:10:15.118-07:002010-04-07T12:10:15.118-07:00John-
I make it up as I go along, but you should ...John-<br /><br />I make it up as I go along, but you should be aware that Cato Institute has long held the position that monetary policy is too tight. <br /><br />For myself, I don't see how any single nation or punditry can blah, blah much about monetary policy, as capital flows freely across borders, and cash too. <br /><br />You can open up a bank account in China, and pull money out of Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-8480482982665063182010-04-07T11:34:54.970-07:002010-04-07T11:34:54.970-07:00Scott,
Absolutely fabulous comment above. I agre...Scott, <br /><br />Absolutely fabulous comment above. I agree. <br /><br />You too, Benj. Excellent answers in my humble opinion.Johnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-70649285841063665872010-04-07T11:31:41.172-07:002010-04-07T11:31:41.172-07:00To back up my opinion that the fed is nowhere near...To back up my opinion that the fed is nowhere near a rate raising point, Alan Greenspan is telling it like it is this morning in congressional testimony. <br /><br />"If the Fed as a regulator had tried to thwart what everone percieved as a fairly broad consensus that the trend was in the right direction, home ownership was rising and that was an unmitigated good, then Congress would have Johnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-58072533698437782172010-04-07T11:28:19.191-07:002010-04-07T11:28:19.191-07:00How to position oneself: I didn't bring this u...How to position oneself: I didn't bring this up in the post because the post doesn't represent anything new or different from what I have been saying up to now. Asset allocation advice remains the same: Short T-bonds, since interest rates will have to rise if a) inflation rises, and/or b) growth comes in stronger than expected, as commodities are suggesting. Long equities, since growth isScott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-43748480970676364502010-04-07T11:21:51.020-07:002010-04-07T11:21:51.020-07:00John-
Land appreciates in inflations, and can ear...John-<br /><br />Land appreciates in inflations, and can earn income along the way. Uncle Sam will give you huge tax bennies to buy land, and local bankers will allow you to leverage up. <br /><br />If you really think we will see inflation, land or property is a viable option.<br /><br />Put gold on your wife's finger.Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-14185367931915603392010-04-07T11:02:55.850-07:002010-04-07T11:02:55.850-07:00that would be mid-2010 in my above comment...that would be mid-2010 in my above comment...Christian S. Herzeca, Esq.https://www.blogger.com/profile/09913237226503475709noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-13155466594183455922010-04-07T10:56:45.972-07:002010-04-07T10:56:45.972-07:00Scott,
I am inclined to agree with your assesment...Scott,<br /><br />I am inclined to agree with your assesment. But what I think doesn't mean anything. Heck, my congressional representatives won't even so much as reply to my correspondence unless I am parroting their positions. Also, I don't think there is a snowball's chance in....the underworld the fed is going to start raising rates anytime soon. They are totally fixated on Johnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-47781177020522989772010-04-07T10:51:24.659-07:002010-04-07T10:51:24.659-07:00i think bernanke doesn't want future editions ...i think bernanke doesn't want future editions of his economics book to cite how his raising rates in mid-2009 was a repeat of the historical mistakes of 1937.Christian S. Herzeca, Esq.https://www.blogger.com/profile/09913237226503475709noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-82184176991224259582010-04-07T10:14:08.035-07:002010-04-07T10:14:08.035-07:00Unfortunately, I am not a central banker (or perha...Unfortunately, I am not a central banker (or perhaps, fortunately for others).<br /><br />Gold is an unimportant yellow metal. Right now there are gold ETFs buying, and Indian and Chinese "investors" with medievel outlooks who pile their savings in. Add to it that stock markets have been shakey for a fe years (though there has been a snappy recovery in emerging markets). <br /><br />Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.com