This Is The Bottom For Stocks

[carseller]

Why are these companies going sideways?

http://finance.yahoo.com/echarts?s=GE#char...ource=undefined

It's because they like disinflation and falling commodity priced and lower interest rates.

That trend have turned. We are in a a very inflationary environment, since 2003. After these companies have went flat for a long time (for these companies this is like the 1974 bottom.) They have their margins crushed by inflation. Not only are the graphs similar now to 1974, earnings, dividends are to. That the stock price in spite of that have increased so much, just tells how much money is out there.

It's just that regular people don't want to face up to the fact that their beloved cash, is also loosing buying power, what's happening now, is just against the trend.

COP, is on an upwards trend, because that company like inflation. See the dramatic change from 2003.

Those who don't see these trends, miss the picture, and think's the market is expensive, then it's not.

Edited January 5, 2009 by carseller

[Te Mata]

It have been more than a normal blip, it's the 2 worst bear market of the last 100 years. I think that's as bad as it get's ,as things were far less overpriced leading into this than in 1929. The market was neutrally priced like before the 73-74 bear market leading into this mess, and at the bottom in nov, the market was at the exact same level in terms of valuation that were reached in that bear market. in 1929, stocks were at extremes, much more than in 2007, more than double that level, and then the federal did tons of mistakes to, that caused the market to overshoot very bad. In other countries, non USA countries, the stock indexes fell like 50 % from 1929 to 1932, but people think's that every stock index should fall 89 % now, because that's what happened after 1929 in the US, and it's just in my opionion kind of insane.

Depends whether the blip has blipped or still blipping. I think there is much more blip to go.

People think indexes will fall more because there are still problems... BIG problems in the banking sector, AND the FED along with the rest of the CB/government cabal may be making grave mistakes, different ones to '29-'32, but potentially just as grave. If you know any banking insiders, ask them (off the record) and they will tell you - 2009 is going to be dire.

Plus, in no way can current market action be classed as an overshoot. If anything, still very much an undershoot.

[carseller]

Depends whether the blip has blipped or still blipping. I think there is much more blip to go.

People think indexes will fall more because there are still problems... BIG problems in the banking sector, AND the FED along with the rest of the CB/government cabal may be making grave mistakes, different ones to '29-'32, but potentially just as grave. If you know any banking insiders, ask them (off the record) and they will tell you - 2009 is going to be dire.

Plus, in no way can current market action be classed as an overshoot. If anything, still very much an undershoot.

I think it's overshooting due to lehman brothers, from a range for the dow that is around 12000 as the baseline level. I don't think this is an index fund, investment environment, at least not for dow jones or the FTSE. From 2000- to 2016 the dow jones will perhaps go flat. But some things like energy, gold, fertilizer, and other inflation hedges will increase a lot. It's just that there is a lack of understanding from many towards what is going on, and how to play it. Some are even thinking they should wait, to buy an FTSE index fund, and in this environment, that's not a good way to play it. Unless they are patient enough to wait for inflation to peak, and the next bull market to play out. What people loose in inflation adjusted terms in these "flat" periods, they make back, in the bull markets that happens after inflation have peaked. Something that is far into the future.

Edited January 5, 2009 by carseller

[R K]

Load up then CS. I still think you may be 6/12 months early. I'm more often than not early and make adjustments for that in my personal timing. I was early from going short oil $125/$135 - from memory I think you were even earlier - $100? $110? I was a bit early on gold too $900s, but correct on EURO/USD at 1.60 when most people were insisting 2.00 was coming up. I'm probably a little early on £/Euro now too and maybe a bit late with stocks.

I think you're wrong that "most people" are calling a 90% wipeout - That's not what I'm reading at all except from the very small number of bugs and fiat haters who have been predicting the end of the world as we know it pretty much since it began.

All this easing and liquidity and zero rates will have to end up in prices eventually, I don't think many people are arguing against that at all, only the timing and whether you can perhaps take a major hit to capital by getting in too early. GE for instance is still clearly in a downtrend. You may have picked the bottom correctly, we won't know for a while, but I think you're stretching it to say it's already in a strong uptrend. Price is way way below the 200 DMA for instance, so at the moment it's still a "punt".

[carseller]

Well, I have made real money for a month now, I don't think it's a blip. Anything the federal reserve cannot print, like oil is going to be good as obama takes hold. as I mentioned before treasury notes, th 10 year is not so much in demand, that creates an investment demand for things like oil, as the lower value of US debt is inflationary. It's down down, every day that treasury stuff now.

I think what is cool, is to take the reserves of different oil companies, then you play with the future income from your stocks, in dividend yield, under different oil price scenarios. In a peak oil scenario, with stocks in oil sands, and things like that, even normal oil , if the company have good reserves, can get rather extreme.

When actual supply problems hit the market, and rationing starts, we will be at 400-600 usd sooner than we can blink. It's impossible to time it. But it can happen as a function of our goverment bonds really going down.

That will increase the value of goverment bonds in asia and elsewhere. And create a lowering of standard here, and an increase there. This dynamic can force the oil price extremely high.

[Converted Lurker]

Well, I have made real money for a month now, I don't think it's a blip. Anything the federal reserve cannot print, like oil is going to be good as obama takes hold. as I mentioned before treasury notes, th 10 year is not so much in demand, that creates an investment demand for things like oil, as the lower value of US debt is inflationary. It's down down, every day that treasury stuff now.

I think what is cool, is to take the reserves of different oil companies, then you play with the future income from your stocks, in dividend yield, under different oil price scenarios. In a peak oil scenario, with stocks in oil sands, and things like that, even normal oil , if the company have good reserves, can get rather extreme.

When actual supply problems hit the market, and rationing starts, we will be at 400-600 usd sooner than we can blink. It's impossible to time it. But it can happen as a function of our goverment bonds really going down.

That will increase the value of goverment bonds in asia and elsewhere. And create a lowering of standard here, and an increase there. This dynamic can force the oil price extremely high.

With respect you also held onto a huge chunk of shares that lost 90%+ of their value. Your judgement, of what represents making money on trading, differs from mine...considerably.

[carseller]

With respect you also held onto a huge chunk of shares that lost 90%+ of their value. Your judgement, of what represents making money on trading, differs from mine...considerably.

That was a steep loss that just happened faster than I reacted, and the stocks got so low, that I could hold on to them rather than sell at a loss. It was car stocks, I bought them in around the peak of the oil price, I thought that was a smart move at the time, but when I think of it now, it was not.

This week the stock are up around 30 %, so I think it's on a recovery path. But who knows. They are not making money, and things need to turn around for them. If it does, the stock can increase around 20-50 times, from pennies to dollars. I don't think using a small amount of money buying beaten down things like that, is a bad idea. Things look bad, and you have to have faith, in the sense that you are paying a very little price, for gambling away your weekly salary, or whatever, something you can loose, to make a huge possible profit, odds are much better than at the horse track, or at the lottery.. When you buy an apartment, ideally, in a normal market, if you want it to rent out, you want it in as bad shape as possible to create a upside, the same with beaten down stocks, as bad shape as possible, but still intact, and sometimes it's just needed to take a chance.

A mentality that seems to have ended now, but was very noticeable in november, desember, was that stocks that were extremely cheap, yielding 40-50 % (now these stocks have more than tripled), but it was a mentality in the market that it's different this time, therefore the data does not matters as the economy is about to enter some kind of permanent decline. Kind of a reverse peak of the dotcom bubble mentality, but equally insane, and done by the same people.

The problem I have with the strategy of some people, is that they think they are so smart that their money are going to come from not buying cheap stocks, and holding on to them, but timing things in a way that makes them speculate in the sense buy low to sell higher, the price or specs of the stocks plays very little into things. That is very difficult to achieve with success and is the recipe for not making money. Ignoring any idea if the market is higher or lower next week, and just buy if it looks cheap is better over time.

I am so sure that oil stocks have bottomed out, that it's no discussion about it. I just know it. 10 year treasury notes will go on to loose value. I even think the fed soon should raise interest rates. But we will see if they do that or permit inflation to keep going higher.

Another thing , I would like to say, is that when you look at housing data, and any other kind of data from the economies. you just know, if you have any common sense, that stocks have to be cheap, as they have been very cheap (seen in retrospect), any time before things have been as dire as now.

I am 100 % sure, that the bottom in stocks is behind us. It's not a chance that it's going any lower than 7800 on the dow. This have been the best buying opportunity in more than 25 years, I think, and it's slowly fading away. Anything technical suggest that the bottom was around the 20 of november. Everything is turning up, especially things related to commodities. It's like 1987 for commodities.

Edited January 6, 2009 by carseller

[carseller]

I think you are waiting for something that will never happen. It's like waiting for oil, after it had dropped to 8 dollars in 1998, to drop to 4 or 5 dollars before entering any positions.

[Crash Buyer]

I think you are waiting for something that will never happen. It's like waiting for oil, after it had dropped to 8 dollars in 1998, to drop to 4 or 5 dollars before entering any positions.

So you are expecting a short V shaped recession, with the economy picking up later in 2009?

That's the only way your can scenario work.

[carseller]

So you are expecting a short V shaped recession, with the economy picking up later in 2009?

That's the only way your can scenario work.

No. I am waiting for energy, and things that cannot be printed to go up, as goverment bonds sell off, and the economy to slowly and sluggishly recover. from the 2 half of 2009.

If you look here:

http://finance.yahoo.com/echarts?s=%5ETNX#...ource=undefined

I have compared with 10 year notes. Those stocks. you can find whatever stocks you like, that have a steeper upward curve, lately than 10 year notes, will outperform, those with steep curve will perform well, those with a non steep or flat curv, like GE, will not perform as great, as those with a steeper curve...

Edited January 6, 2009 by carseller

[carseller]

What you can look for in the chart, is that last kind of upward move, that is in stocks , following the downwards move, (the upwards move, that is synchronised with treasury notes) on the chart. It's very inflationary, this move. of course, people were talking about the new japan, long term rates staying low for eternity, but what we are seeing is that all of that was false. That's it's inflation that's coming as treasuries sells off.

[carseller]

let me add that the bear stearn, lehman disaster and all that, kind of have made things happen with commodity prices and inflation that might seem similar to raising interest rates. But don't be fooled. Due to all the stimulus, and everything, once things are clearing as it's doing now, the result will only be more inflation and and finally an upwards trend to long term interest rates. Into the future, some of the fire will come back, and the same upwards trend in long term interest rates seen after the 1950-s, maybe lasting for a long long time, especially with a lack of oil imposed ontop of this trend. Then in this new enviroment, recessions will be like hitting the brakes, before people borrow, and play the long term inflation trend again. It will be a totally different economy to how the 1982-2000 economy was like. If you buy a house in this new economy, and have a long term fixed rate mortage, it will not be like in Japan, but rather like in 1950, when you could borrow at very low rates, only to 15 years later have seen that the mortage payments were "nothing", even the mortage was big in 1950. Inflation will be much higher than we have been used to from the 80-90-s era.

Edited January 6, 2009 by carseller

[R K]

The last major sell off in Sept/Oct started from around 1200 on the SPX. From there we went down to 741 and the VIX hit 80 something.

VIX is now 38 and in fact is starting to look oversold. SPX by contrast has only regained ground to 932. The technical indicators MACD/RSI are saying this rise is now getting "tired" imo. Stocks have already risen 20% overall (some much more, some less), but overall we are not in a bull market by any stretch yet. It may come later in the year but I doubt it will get there in one move from the extreme levels we saw 2 months ago.

With oil, we have had one major move down. The "A" wave. I believe what we are seeing now is a retracement of that massive, unprecedented fall, the "B" wave bounce. That may have some way to go yet, but that isn't the end of it. We need to see where the "C" wave sell off ends up.

The interesting thing will be the next low - the lows that are coming when we have the next sell off. If you are correct then these will hold above Oct/Nov and that will give a better picture. That's probably coming once the "good news" of the Obama inauguration is out of the way and his stimulus package is know and passed. That's probably the sell into strength moment.

Edited January 6, 2009 by Red Kharma

[CharlieChuck]

I think you are waiting for something that will never happen. It's like waiting for oil, after it had dropped to 8 dollars in 1998, to drop to 4 or 5 dollars before entering any positions.

If I'm wrong ( I guess if the FTSE hits 5000 and keeps rising), then I'll buy back in, If it recovers to 6500, i'll only get a 30% gain not a 40 odd% gain. I think the downside danger is too much to risk of losing the gains I've made in the past few months.

Another thing we shouldn't forget, which may be the next Lehmans, is the big 3 car companies still need sorting out, until that's definite I personally don't think you can really know which way it's going.

[carseller]

If you are worried about the car companies? Then I suggest you avoid stocks. There is not a chance in this world that anything related to those car companies will turn out to a "new lehman". What you are in reality waiting for is that news get good, stocks get expensive, so that you can buy high. It's a horrible strategy. If you buy low, you will do fine over time. If you buy expensive, then you are speculating not investing, and it's so much more difficult to make money.

I think you should try to value stocks, not look for good news. Just begging for low returns in my opinion.

Edited January 6, 2009 by carseller

[Crash Buyer]

No. I am waiting for energy, and things that cannot be printed to go up, as goverment bonds sell off, and the economy to slowly and sluggishly recover. from the 2 half of 2009.

Why do you say 'no'? That is exactly the type of short recession I said you must be expecting!

let me add that the bear stearn, lehman disaster and all that, kind of have made things happen with commodity prices and inflation that might seem similar to raising interest rates. But don't be fooled. Due to all the stimulus, and everything, once things are clearing as it's doing now, the result will only be more inflation and and finally an upwards trend to long term interest rates. Into the future, some of the fire will come back, and the same upwards trend in long term interest rates seen after the 1950-s, maybe lasting for a long long time, especially with a lack of oil imposed ontop of this trend. Then in this new enviroment, recessions will be like hitting the brakes, before people borrow, and play the long term inflation trend again. It will be a totally different economy to how the 1982-2000 economy was like. If you buy a house in this new economy, and have a long term fixed rate mortage, it will not be like in Japan, but rather like in 1950, when you could borrow at very low rates, only to 15 years later have seen that the mortage payments were "nothing", even the mortage was big in 1950. Inflation will be much higher than we have been used to from the 80-90-s era.

As EDM has said previously, the quantitative easing is designed to counter deflation and these forces are so powerful that it's unlikely that significant inflation will result.

The last major sell off in Sept/Oct started from around 1200 on the SPX. From there we went down to 741 and the VIX hit 80 something.

VIX is now 38 and in fact is starting to look oversold. SPX by contrast has only regained ground to 932. The technical indicators MACD/RSI are saying this rise is now getting "tired" imo. Stocks have already risen 20% overall (some much more, some less), but overall we are not in a bull market by any stretch yet. It may come later in the year but I doubt it will get there in one move from the extreme levels we saw 2 months ago.

With oil, we have had one major move down. The "A" wave. I believe what we are seeing now is a retracement of that massive, unprecedented fall, the "B" wave bounce. That may have some way to go yet, but that isn't the end of it. We need to see where the "C" wave sell off ends up.

The interesting thing will be the next low - the lows that are coming when we have the next sell off. If you are correct then these will hold above Oct/Nov and that will give a better picture. That's probably coming once the "good news" of the Obama inauguration is out of the way and his stimulus package is know and passed. That's probably the sell into strength moment.

Agreed, it's a bear market rally. Typically these last around 2 months (some shorter or longer) so we should be near the drop now. I've shorted the FTSE at these levels and I think 3000 is a reasonable target.

With oil, the end of the Gaza invasion and the Gazprom disputes should provide the necessary triggers. I agree on a further drop, I'd expect around $25.

[CharlieChuck]

If you are worried about the car companies? Then I suggest you avoid stocks. There is not a chance in this world that anything related to those car companies will turn out to a "new lehman". What you are in reality waiting for is that news get good, stocks get expensive, so that you can buy high. It's a horrible strategy. If you buy low, you will do fine over time. If you buy expensive, then you are speculating not investing, and it's so much more difficult to make money.

I think you should try to value stocks, not look for good news. Just begging for low returns in my opinion.

I sold out when the FTSE was over 6000 a year or so ago, and have got back in and out a few times on the bounces, I've picked a couple of individual shares as dogs along the way - and a few others that I've made money from, but overall If I get back in at any point before 6000 I'm better off. Without the benefit of a crystal ball no one knows whether November was the bottom or not, I don't think it was - you think it was. Leaving myself the option of buying back in if I'm wrong seems a reasonable hedge to me.

edit to add:

What you are in reality waiting for is that news get good, stocks get expensive, so that you can buy high. It's a horrible strategy.

In general I consider trying to pick the direction of a stock to be at best a 50/50 guess. Unless you have inside information you never have enough facts to predict what's going to happen, and from my day job I know how easy it is hide bad information in accounts, and this doesn't include outside events that can't be foreseen but can affect a valuation. Following the herd (or anticipating what the herd will do), to me, appears to be give more than a 50% chance of success as long as you're early enough and not too greedy.

Edited January 7, 2009 by CharlieChuck

[carseller]

I sold out when the FTSE was over 6000 a year or so ago, and have got back in and out a few times on the bounces, I've picked a couple of individual shares as dogs along the way - and a few others that I've made money from, but overall If I get back in at any point before 6000 I'm better off. Without the benefit of a crystal ball no one knows whether November was the bottom or not, I don't think it was - you think it was. Leaving myself the option of buying back in if I'm wrong seems a reasonable hedge to me.

edit to add:

In general I consider trying to pick the direction of a stock to be at best a 50/50 guess. Unless you have inside information you never have enough facts to predict what's going to happen, and from my day job I know how easy it is hide bad information in accounts, and this doesn't include outside events that can't be foreseen but can affect a valuation. Following the herd (or anticipating what the herd will do), to me, appears to be give more than a 50% chance of success as long as you're early enough and not too greedy.

The herd are already moving in, so your chances are less than 50 %. Maybe 10 %. Maybe 1-2 weeks left before the market will move in a serious way, when Obama takes office.

Instead of comparing to some 6000 number you probably have paid tax and transaction and other frictional costs that would reduce your long term gain, I rather think that for every day the market gains, you loose money long term, compared to having bought at the bottom in november. I would not think about the 6000 number at all, you sold, you have a sum of money, that is reality, the 6000 number does not exist, it's fiction. It's the same psychology as when people have a stock that loose, and they hold on to it and say to themselves (if only it get back to what I paid for it I sell it). It's as if you are saying, if it climbs above 6000, I loose money, so then I must buy, but it's not true, you are loosing for every second the stocks moves above the november 20-21 level. I can tell for sure, that things looked just as bad as now for the real economy, in any recession before when the stock market had bottomed out. I mean, if people look for things such as unemployment to go down, or house prices to rise, then the stock market will already have gained back everything it will gain back, in the kind of inflationary long term range bound market we have.

Edited January 7, 2009 by carseller

[carseller]

It's quite easy to see on a chart, any chart, but here are some stocks that shows it: http://finance.yahoo.com/echarts?s=%5ETNX#...ource=undefined

the 2008 correction is like 1974, not only visually, but also around identical in terms of valuations. only 1 time during the last 100 years have there been a correction worse than the current on. people are waiting for miracles if they want a lower stock market I think.

[Te Mata]

The last major sell off in Sept/Oct started from around 1200 on the SPX. From there we went down to 741 and the VIX hit 80 something.

VIX is now 38 and in fact is starting to look oversold. SPX by contrast has only regained ground to 932. The technical indicators MACD/RSI are saying this rise is now getting "tired" imo. Stocks have already risen 20% overall (some much more, some less), but overall we are not in a bull market by any stretch yet. It may come later in the year but I doubt it will get there in one move from the extreme levels we saw 2 months ago.

With oil, we have had one major move down. The "A" wave. I believe what we are seeing now is a retracement of that massive, unprecedented fall, the "B" wave bounce. That may have some way to go yet, but that isn't the end of it. We need to see where the "C" wave sell off ends up.

The interesting thing will be the next low - the lows that are coming when we have the next sell off. If you are correct then these will hold above Oct/Nov and that will give a better picture. That's probably coming once the "good news" of the Obama inauguration is out of the way and his stimulus package is know and passed. That's probably the sell into strength moment.

CBOE put/call ratio is also indicating a top 'round about here. The higher probabilty trade on indices is definitely short right now.

[carseller]

CBOE put/call ratio is also indicating a top 'round about here. The higher probabilty trade on indices is definitely short right now.

It's not possible to make money over time, trying to predict that short term.

I think there is a dual bubble in agriculture and solar energy. That's probably the best way to make money now on speculation.

[CharlieChuck]

The herd are already moving in, so your chances are less than 50 %. Maybe 10 %. Maybe 1-2 weeks left before the market will move in a serious way, when Obama takes office.

Instead of comparing to some 6000 number you probably have paid tax and transaction and other frictional costs that would reduce your long term gain, I rather think that for every day the market gains, you loose money long term, compared to having bought at the bottom in november. I would not think about the 6000 number at all, you sold, you have a sum of money, that is reality, the 6000 number does not exist, it's fiction. It's the same psychology as when people have a stock that loose, and they hold on to it and say to themselves (if only it get back to what I paid for it I sell it). It's as if you are saying, if it climbs above 6000, I loose money, so then I must buy, but it's not true, you are loosing for every second the stocks moves above the november 20-21 level. I can tell for sure, that things looked just as bad as now for the real economy, in any recession before when the stock market had bottomed out. I mean, if people look for things such as unemployment to go down, or house prices to rise, then the stock market will already have gained back everything it will gain back, in the kind of inflationary long term range bound market we have.

The point re the 6000 odd number is that this is my pension, in Isa and Sipps, I'm not looking to become a millionare overnight, but I'm looking for a decent return above inflation in the medium to long run, and the value now is above what the value was when the markets started falling, I compare it to the 6000 knowing that as long as I get back in before it gets to 6000 again (or adjust for inflation say 5500) then it's still gaining overall. It's a trade off between risk and security. I did buy in november (though not using all my pot - about 25% of it - at about 4000, not the exact bottom) and sold after a 10% gain, after doing the same in october although I think i timed that one better - about 15% gain though again not using the whole pot. I spent much of the earlier part of this year since getting out of the maket in Gilts/corporate bonds and low risk funds/cash - didn't make stellar returns but didn't lose too much when everything else was collapsing. My reckoning is a 10% gain on 25% of your pot is a 2.5% gain overall, which when cash is earning next to nothing is a pretty good return for a month, especially when the other 75% of your pot is still earning through lower risk funds/shares etc. I know stock markets price in events before they happen, but that doesn't mean they are pricing in the right events, or a large enough recession.

I maybe being greedy hoping for another fall to new low (or even back to existing lows) before I get fully back in, but it's a risk I'm prepared to take, as I think this is going further down.

It's quite easy to see on a chart, any chart, but here are some stocks that shows it: http://finance.yahoo.com/echarts?s=%5ETNX#...ource=undefined

In 2001 this appears to bottom twice before the final big dip in 2002. I still think we'll see a further drop either to new or existing lows from here.

[carseller]

actually, it's peak oil that's upon us. I think food prices will explode when peak oil really hits, but who knows.

Things like fertilizer, is expensive, unless food prices explode, and suppose that's what they will do, into the future.

[carseller]

The point re the 6000 odd number is that this is my pension, in Isa and Sipps, I'm not looking to become a millionare overnight, but I'm looking for a decent return above inflation in the medium to long run, and the value now is above what the value was when the markets started falling, I compare it to the 6000 knowing that as long as I get back in before it gets to 6000 again (or adjust for inflation say 5500) then it's still gaining overall. It's a trade off between risk and security. I did buy in november (though not using all my pot - about 25% of it - at about 4000, not the exact bottom) and sold after a 10% gain, after doing the same in october although I think i timed that one better - about 15% gain though again not using the whole pot. I spent much of the earlier part of this year since getting out of the maket in Gilts/corporate bonds and low risk funds/cash - didn't make stellar returns but didn't lose too much when everything else was collapsing. My reckoning is a 10% gain on 25% of your pot is a 2.5% gain overall, which when cash is earning next to nothing is a pretty good return for a month, especially when the other 75% of your pot is still earning through lower risk funds/shares etc. I know stock markets price in events before they happen, but that doesn't mean they are pricing in the right events, or a large enough recession.

I maybe being greedy hoping for another fall to new low (or even back to existing lows) before I get fully back in, but it's a risk I'm prepared to take, as I think this is going further down.

In 2001 this appears to bottom twice before the final big dip in 2002. I still think we'll see a further drop either to new or existing lows from here.

If I were you, I rather put everything in railroad stocks, compared to buying the FTSE. In railroad, atleast some of them, you have alternative energy, and agriculture commodities, and exposure to the oil price, even exposure through the growth in china, as that pass through the oil price 4 in 1. There is little chance the FTSE will grow on an inflation adjusted basis for the next 5-6 years I think.

Edited January 7, 2009 by carseller

[rnicoll]

actually, it's peak oil that's upon us. I think food prices will explode when peak oil really hits, but who knows.

Things like fertilizer, is expensive, unless food prices explode, and suppose that's what they will do, into the future.

Have you seen the price of wheat? It tripled because of the whole biofuels debacle. Now that's finally sorting outself out, food prices should actually start dropping, although the supply chain took the worst of the hit so the end consumer may well sell prices go up before they go down...