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tuggybear

Mother Of All Bubbles Prepares To Burst

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link : http://www.sundayherald.com/news/heraldnew...es_to_burst.php

WHAT HAS the food crisis got to do with Northern Rock? Quite a lot, actually. The rocketing price of wheat, soya beans, sugar, coffee etc is all part of the credit crisis which has caused panic in financial markets and encouraged investors to take their money out of risky mortgage bonds and shaky equities and put it into commodities as "stores of value". Put another way, the Western banks are exporting their debts to the third world.

Cont.

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Guest Mr Parry
link : http://www.sundayherald.com/news/heraldnew...es_to_burst.php

WHAT HAS the food crisis got to do with Northern Rock? Quite a lot, actually. The rocketing price of wheat, soya beans, sugar, coffee etc is all part of the credit crisis which has caused panic in financial markets and encouraged investors to take their money out of risky mortgage bonds and shaky equities and put it into commodities as "stores of value". Put another way, the Western banks are exporting their debts to the third world.

Cont.

Nice observation!

Tis' 'bout time speculation of the price of basic human needs was outlawed. These greedy banker/"investor" ba$tard$ are going to starve folks in the Third World to death - all because of "fears in martkets".

Why can't they just speculate on the price of those stupid big TV's or iPods. These are the only things in the CPI basket anyway.

What think?

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Nice observation!

A) Tis' 'bout time speculation of the price of basic human needs was outlawed. These greedy banker/"investor" ba$tard$ are going to starve folks in the Third World to death - all because of "fears in martkets".

B) Why can't they just speculate on the price of those stupid big TV's or iPods. These are the only things in the CPI basket anyway.

What think?

A. Merchants! Always been there. Unfortunately the "Labour" party dropped their commitment to clause-4 around 1992 I think, and any "redistribution of wealth", seems to have been upward, and toward Party Toadies, Quangos, and Greenatics!

B. Fad items, plummeting in "value", exactly why they are in CPI basket. Makes the figures better. What happened to the price of onions, eh?

You really down there in Asia? I'm freezing up here in Scotland!

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Cant see this bubble bursting this decade what with the weak dollar, inflation, emerging BRIC economies, increasing demand, supply contsraints, the water bubble itself is only just starting.

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Cant see this bubble bursting this decade what with the weak dollar, inflation, emerging BRIC economies, increasing demand, supply contsraints, the water bubble itself is only just starting.

Indeed. I don't think we're only at the beginning.

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......reminds me of the reports around the millenium that because average house prices had breached the £100,000 mark that they were over-priced and due for a correction. <_<

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It will be another 5 or 6 years before other people in the media figure out why commodity prices are rising. The most astounding piece of nonsense is that dairy prices are rising because the Chinese have suddenly changed their diet and are eating lots of cheese and drinking gallons of milk. This is despite the fact that reports show that lactose intolerance is extremely high in China (typically over 80% or over 90% depending on the region) why you may ask then would people en masse adopt the kind of diet that will make them ill? This simply defies all logic!

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It will be another 5 or 6 years before other people in the media figure out why commodity prices are rising. The most astounding piece of nonsense is that dairy prices are rising because the Chinese have suddenly changed their diet and are eating lots of cheese and drinking gallons of milk. This is despite the fact that reports show that lactose intolerance is extremely high in China (typically over 80% or over 90% depending on the region) why you may ask then would people en masse adopt the kind of diet that will make them ill? This simply defies all logic!

They are said to be wanting to cool their economy down a bit. A few billion off sick most weeks should do it :lol:;)

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It will be another 5 or 6 years before other people in the media figure out why commodity prices are rising. The most astounding piece of nonsense is that dairy prices are rising because the Chinese have suddenly changed their diet and are eating lots of cheese and drinking gallons of milk. This is despite the fact that reports show that lactose intolerance is extremely high in China (typically over 80% or over 90% depending on the region) why you may ask then would people en masse adopt the kind of diet that will make them ill? This simply defies all logic!

Well they cant afford pork anymore maybe thats why

or they need milk to wash down the cheesy pasta and garlic bread that they are now fond of

Edited by Bardon

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A functioning commodities futures market is an absolute essential to keep people from getting hungry.

Its only because farmers can guarantee a future market for their product at a known price, that they can go to their bank and get a loan for seeds, fertilizer and tractors that they need to produce the food in the first place.

The problem underlying speculation isn't solved by lambasting the futures markets. But perhaps regulation will be tightened up in future to prevent another bubble.

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The biggest speculators and economy benders are the central banks and their political masters and their globalist tendencies.

Encouraging "growth" which cannot be matched by supply and printing money to create that "growth" in themselves have caused the problems far earlier than any speculative activity from elsewhere.

The "housing economy" has been able to self-feed itself despite reality - simply by creating and taking on more and more debt and cutting back on saving. The farming sector in no way could do this - if it were not for increased farm gate prices over the last few years UK farmers would have gone bankrupt in the thousands, or just given up. Still, local sources have been replaced by bought in supplies from all corners of the world - again another globalist distortion that has increased their prices whilst undermining local production to the point at which the supermarkets can price the UK farming sector out of the market.

You'll know when there is real speculation in the commodities market when you are bombarded on TV and weekly in the post with companies offering agricultural funds or buying slices of agricultural land to rent on to farms. Until then it is just investors fleeing the central bank print machines and all markets previously tied to the effluent form those machines.

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It's interesting to hear someone call a commodity market top and then go on to state the EXACT reason why we are FAR FAR away from a top. What a pleb. :lol:

With the sheer magnitude of increasingly worthless paper sloshing around the world right now, I wouldn't be suprised to see a commodities boom more spectacular than anyone dared imagine.

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You'll know when there is real speculation in the commodities market when you are bombarded on TV and weekly in the post with companies offering agricultural funds or buying slices of agricultural land to rent on to farms. Until then it is just investors fleeing the central bank print machines and all markets previously tied to the effluent form those machines.

They have already started with alternative energy. A fund has been promoting itself very heavily in the Times (pictures and sketches of mega wind turbines it intends to fund).

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This is despite the fact that reports show that lactose intolerance is extremely high in China (typically over 80% or over 90% depending on the region) why you may ask then would people en masse adopt the kind of diet that will make them ill? This simply defies all logic!

:lol: though we have been living on a diet thats been making us fat and ill for years, resulting in another mega bubble - the NHS!

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It is just more misallocation of wealth. We have had the dot com boom, we have had the housing boom and now we have the commodities boom. As each bubble collapses the Central banks pump cheap money into the market to try to prevent a recession. In reality all that happens is that the speculation simply moves to another asset class. Given that US treasuries are now offering interest rates lower than inflation then it is hardly surprising that people are seeking other ways of protecting their wealth and are dumping their cash into commodities. It is rentier capitalism at its most basic and deadly, where people try to profit from the mere control of a resource rather than any attempt to add value.

What is certain is that some time down the road the monetary landscape will change and the commodity bubble just like its counterpart in the 1970's will pop. Those who think that the massive increase in demand from places like China and India will underpin it for ever are making exactly the same supply and demand mistake that has so often been made about the UK housing market.

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'Tis strange how those that talk of hyper inflation of the money supply see it in isolation from the even larger collapse in derivative and asset backed debt.

The desperate switch into commodities will be relatively short-lived and will fall so hard and fast it will make your nose bleed.

Oil, food and that other thing are trading on thin air. IBs are desperately trying to claw back enough capital to continue in business. Increases in money supply (even if correct) is a total red herring in this highly deflationary environment.

There may be another 12 months or so to go in this commodity "boom" and whoever is holding them when the music stops (and the dollar is supported by the entire western world and probably the Asian world as well) will be wiped out. :rolleyes:

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There may be another 12 months or so to go in this commodity "boom" and whoever is holding them when the music stops (and the dollar is supported by the entire western world and probably the Asian world as well) will be wiped out. :rolleyes:

Just before the water bubble bursts then possibly the right time to get back into the new property bubble as it should be in the recovery phase by then eh....

Edited by Bardon

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The commodities boom/bubble is far from over. Even if you honestly believe it's just a bubble you MUST also believe it has further to run.

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The commodities boom/bubble is far from over. Even if you honestly believe it's just a bubble you MUST also believe it has further to run.

Especially when you consider the following

Take oil, for instance: With the exception of one off the coast of Brazil, no major new oil fields have been discovered in more than 35 years. More than 80% of the oil pumped today comes from wells that are at least 20 years old — and those oil fields are now in decline. Alaskan fields are in decline now, and so are Mexico’s. The U.K., one of the world’s great oil exporters for 25 years, will be importing oil within the decade. And in Saudi Arabia, despite promises to increase oil production over the past three years, they’ve been unable to boost output by a single drop. Now, according to the U.S. Army Corps of Engineers, there are only 41 years-worth of proven oil reserves left on Earth. And to make matters worse, not a single oil refinery has been built in America since 1976 — while the number of operational refineries is falling fast. In 1981, the U.S. had 324 oil refineries. Today, there are just 132.

No matter which commodity you look at, the story is similar ...

Gold: In South Africa, gold production has fallen to its lowest level since the great strike of 1922 — 85 years ago. Worldwide, while gold demand has jumped 14% since 2001, gold production has fallen 7%.

Base metals: When it comes to copper, lead, nickel, zinc and tin — no new mine shafts have been sunk in 20 years. No lead smelter has been built in America since 1969. And even worse, few are even looking for zinc or tin.

Uranium: The U.S. Army Corps of Engineers reports that the world’s supply of low-cost uranium will vanish within 20 years.

Grains: For the first time in history, the world is consuming more food than it produces. Global wheat stockpiles have fallen to a 32-year low, while the U.S. wheat stockpiles hit a 59-year low. Corn supplies have fallen to the lowest levels on record.

Silver: Manufacturers who need silver to make their products are fighting the growth in Barclay’s silver ETF. Reason: There simply isn’t enough silver to go around. And as if all this weren’t enough to drive resource prices through the roof, new supplies are years in the future: By the time miners, drillers and farmers realize that demand has exploded, it’s too late.

It takes years to find new sources ...

More years to dig the mines and drill the wells ...

More years to build the refineries and processing plants ...

Still more years to build the pipelines and freighters to move the new commodities to market ...

And all the while, global resource prices are rising rapidly

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It is just more misallocation of wealth. We have had the dot com boom, we have had the housing boom and now we have the commodities boom. As each bubble collapses the Central banks pump cheap money into the market to try to prevent a recession. In reality all that happens is that the speculation simply moves to another asset class. Given that US treasuries are now offering interest rates lower than inflation then it is hardly surprising that people are seeking other ways of protecting their wealth and are dumping their cash into commodities. It is rentier capitalism at its most basic and deadly, where people try to profit from the mere control of a resource rather than any attempt to add value.

What is certain is that some time down the road the monetary landscape will change and the commodity bubble just like its counterpart in the 1970's will pop. Those who think that the massive increase in demand from places like China and India will underpin it for ever are making exactly the same supply and demand mistake that has so often been made about the UK housing market.

You took the words straight out of my mouth

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Cant see this bubble bursting this decade what with the weak dollar, inflation, emerging BRIC economies, increasing demand, supply contsraints, the water bubble itself is only just starting.

Interesting - it's bothered me for some time how much we in the UK waste when we know there will be a growing global demand. If we didn't waste so much we could be exporting it.

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I hope there is correction so I can buy some more. This bull market is alot closer to the bottom than the top. I can't think of anywhere else I would rather put my money at the present time, it's certainly not stocks or houses or a below inflation return in bonds or cash in an insolvent bank.

Edited by FLASH_2007

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It's interesting to hear someone call a commodity market top and then go on to state the EXACT reason why we are FAR FAR away from a top. What a pleb. :lol:

With the sheer magnitude of increasingly worthless paper sloshing around the world right now, I wouldn't be suprised to see a commodities boom more spectacular than anyone dared imagine.

since the dollar began falling and emerging markets began booming in 2003 ...

Corn is up 39.5% ...

Wheat is up 133.9% ...

Oil is up 140.8% ...

Gold is up 149.8% ...

Soybeans are up 159.2% ...

Petrol is up 203.6% ...

Platinum is up 224.2% ...

Silver is up 257.7%, and

The entire CRB commodity price index is off the charts

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  • 293 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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