Updated September 19, 2024

Don't expect to see lower commodity prices soon! We will probably have a cyclical top in 2045 or 23 years from now.

We forecasted what is happening now (2022) in 2017-2018. As usual, most people did not pay attention to it or did not believe such would be possible.

The day is close, and we shall see double top breakouts on most of the Point & Figures charts below (Copper and the Reuters Commodity index) ...and resistance will become support. That day will be the OFFICIAL beginning of the hyperinflation cycle...AND THESE ARE THE DAYS... Uh...no inflation? Who pretends this... the price of Cotton and Coffee is exploding. The price of rubber has gone up by 400%. Grains are next...and Cattle...and Corn...and Rice.	Where are the Talking Heads pretending we would see price deflation? First comes hyperinflation, later on, deflation. The moving averages of almost all commodities show a positive cross-over. Point and Figure charts cascade reversals...Most commodity charts are preparing a Bull run of at least 30% to 40%. This is inflation and not a deflation scenario! REAL ASSETS are booming and will continue to do so for some time..... [Exceptions are High Order Capital Goods - the value of some goods will go up in nominal terms only.] Authorities pretending we're only seeing a temporary spike!? Absolutely NOT true. Expect the sliding dollar and QE to infinity to add fire to the inflation...
Published January 2009: All commodities bottomed at the beginning of 2009. Others have reversed course. This rather looks like the return of Inflation instead of Deflation, doesn't it?! Anticipate shortages and dramatically higher prices of key base-industrial commodities going forward—likely to materialize in the second half of 2009 and in 2010. Mid-2009, we had plenty of reversals on the charts "and" Bullish Cross-overs of the 50 and 200-day Moving Averages: Copper, the CRB index, the CCI index,..." "Commodities are REAL ASSETS. All commodities are poised to rise in an ongoing major bull market rise in the years to come. Especially the LOCG (low-order consumer goods) commodities (food and energy). Whatever happens to the economy, the instrument used to exchange goods has been debased and is becoming worthless. Only the Herd still lives in denial. The coming Hyperinflation will change this. We are seeing the confirmation of a shift from HOCG (high-order capital goods) to LOCG (low-order consumer goods). As Ludwig von Mises explained, this process is part of the Credit Crunch and the cleansing of the economic system. As we write these lines [May 2009], China accumulates LOCG (food and energy). Commodities will be the 'lifetime investment' opportunity for next years. The deleveraging and the Garage sale have created a situation at the very origin of a huge price bounce. The 2008 action is a HUGE BEAR trap. The lower gold and silver prices are forced via manipulation, and the higher prices will rise later. Higher than would otherwise have been the case.

The world hasn’t realized that John Maynard Keynes’ policies are flawed and dangerous.

Commodities are in the next leg of their long-term bull market, starting in 2009. This action will be a reaction to the 2008 crash, which caused SUPPLY destruction.

Commodities such as oil, grains, precious metals, etc., had a great upleg in early 2008 and then had a brutal correction during the second half. Although much of it is attributed to deflation and “demand destruction”, these conditions are short-lived. Two basic reasons: shortages (supply destruction) and rising inflation. Since government policymakers will try to avert an economic contraction, they will flood the economy with inflation and renewed government spending. Economic policy decision-makers at the federal level think that “increased consumption” is the key to economic growth because the Keynesian school of economics influences them. The bottom line is that conditions are ripe for commodities to resume their bull market and reach new highs during 2009-2010. As an offshoot of this, you will also see global conflicts tied to natural resources as countries with growing populations need more food, water, energy, etc.

In contrast to real estate, the supplies of foodstuffs never reached an excessive level, as stockpiles are at multi-decade lows. Very few consumers ever speculated on food, while “flipping” of real estate was common. Food-related ETFs didn’t even exist a few years ago; that’s how novel investing in food is. Although builders became very wealthy during the housing boom, farmers benefited very little until this year. Corn, wheat, soybeans, and rice sell for less on the Chicago Board of Trade than they did a year ago, while costs have jumped. Now that banks are reluctant to extend credit, the capital investment in agriculture will shrink to an unsustainably low level. Those are indications of a major market bottom, not a recently popped bubble.

The current fear and turmoil in the market are creating incredible long-term buying opportunities in the commodities sector (e.g., Palladium, Silver, Copper, Platinum, Coffee, soybean, etc.).

Investors should treat such extreme conditions as opportunities rather than take the herd mentality and view them as disasters; historically, the masses have always been on the wrong side of the equation, and there is no reason to expect anything different this time either.

A Commodity Super Cycle has been in existence for over 100 years.

The peaks have occurred 30 years apart. These cycles began after the Federal Reserve and Internal Revenue System were created in 1913. The Federal Reserve System and the Internal Revenue System are still in existence but have grown larger yearly since 1913. Since they are still here and larger than ever, probably, the Commodity Super Cycles are still in place. Let’s take another look at the cycles I am referring to.

The top or peak of the first commodity, “Super-Cycle,” occurred in 1920. This was seven years after the Federal Reserve System was established. The tops occurred in 1920, 1950, and 1980, and the current cycle was on course to peak in 2010. From here on out, the action should be fast and furious up to the top. We know that the last gold bull market peaked in January 1980. That was the peak in Super-Cycle III. The current bull market in gold has a high probability of peaking with the 30-year Super-Cycle IV.  W. D. Gann

The last commodity bear market lasted 22 years and ended 5+ years ago. We've spent much of the past 5 years simply regaining price levels that sometimes hit multi-decade lows. In the 1990s, for example, humanity enjoyed prices on some commodities not seen for 30-40 years.

And in the last 5 years, commodities were hardly an investment theme the general public participated in. The public complained about commodity prices--they didn't invest in them. They preferred Dotcoms, Financials, Industrials, and Real Estate. No investments in Oil stocks, Copper, Agricultural, or Gold and Silver mines.  Recently, the Institutional Investor has only started to observe the commodity market. As of August 4, 2008, Deutsche Bank has even called it a top.

Tell your banker you want to buy Gold and/or Silver, and he will have to call Headquarters to save him. Tell him you want to take physical delivery, and you will see smoke come out of his ears. Since there is no "Volcker crunch" of 15-20% interest rates, it should be pitifully obvious, even to women, children, and the blind, that the gold and commodities bull will continue until interest rates rise above M3 money supply growth. Those calling for an end to the commodity boom make a terrible mistake.

Deflation Scare is the Perfect Camouflage for a Hyperinflationary policy!

The deflation scare currently hovering over the entire market, particularly in the metals and commodities sectors, has been brutal. But important today is that this “scare” cannot and will not evolve into a genuine deflation.  What we have today is falling asset prices in real estate, commodities, and stocks, as well as a rise in the value of the US dollar. This has led many to wrongfully conclude that we are not only experiencing a deflation scare but that a depression brought on by a deflationary collapse is imminent. The massive bail-out programs and government interventions result in MONETARY INFLATION, leading to a Hyperinflation cycle.

BACKWARDATION AND CONTANGO

One of the easiest measures of whether fundamental or speculative forces drive a market is to look at the spread between the 1st and 2nd-month contracts. If the commodity is in backwardation (where the 1st month is at a premium to the 2nd), it is taken to indicate a short-term supply deficit. If the spread is in contango, as is normally the case, the size of the contango can give us some additional information.

If the spread is tight, and one would expect most contangos to be tight with interest rates so low, then the potential for an exogenous force being applied is reduced. However, if there is a widespread increase in prices, it suggests that investors are buying longer-dated contracts and, in the process, pushing them to a premium over the front month. This may suggest tracking funds are becoming more active.

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