One of the bigger keys to what’s in store for commodity prices will be the impact that the stronger dollar emits. While most expect pressure to stem from increasing dollar strength, and certainly that is likely in the short run, the longer term possibilities hold that while exports may suffer, these markets are world markets and the overall supply demand issues will dictate. So in those markets where legitimate shortages exist, one can clearly anticipate prices to rise as that commodity becomes more scarce. Identifying those markets will provide opportunity.
My greatest concern as a soft trader is the effect of all the debt being piled on in the US. I’m concerned as a citizen, but beyond that what will transpire if and when the relative “safety” sought, and usually found, by investors among US Treasuries proves to no longer be the safe investment they once were? Already we’ve seen evidence that Warren Buffett’s paper is more attractive. Eventually inflation will result in my thinking, just a question of when….
