Greg's Note: Some say that history is destined to repeat itself, that everything runs in cycles. For many areas of our world, this is true. But not always. Outstanding Investments' Kevin Kerr explains that anyone waiting for a large commodities bubble to pop will wind up waiting indefinitely. We may just be seeing a changed world that will not recover from the grips of scarcity and limited supply. Thee are hungry mouths to feed and not enough to go around. Do you think that we're seeing a bubble or do you think Kevin has this one right? Let us know by writing to greg@whiskeyandgunpowder.com. Whiskey & Gunpowder
2008 has been an incredible year for commodities. While this drastic shift in focus to our finite global resources may seem immediate to the vast majority of Earth's inhabitants, it's actually been coming for a very long time. Many of us out there who have been involved in commodities trading and analysis have been warning, watching and waiting for the last two-three decades. So it comes as little shock to us that we are in this "crisis" now. The Long Emergency One of my favorite writers and lecturers is James Howard Kunstler. The Long Emergency is the title of one of Kunstler's books, as well as one of his catchphrases, and, boy, is it dead on. ~~~~~~~~~Only Hours Remain ~~~~~~~~~ Last Chance for Guaranteed Gains We're still offering you the chance to profit from guaranteed 600% gains in the next six months. This is an offer that does not come around often and will be closing in just hours. Don't wait a moment longer. Click here to begin your six months of profitability right away… ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ This commodities frenzy, and the related dash by nations to snatch up and secure all sorts of resources, has been a long time coming. It certainly didn't happen overnight. I can safely say that for the vast majority of my career, commodities have been the poor redheaded stepchildren of the investment world. Two decades ago, when I walked onto the trading floor of the New York Cotton Exchange at the old World Trade Center, the climate was very different from today's. Back then, most "mainstream" investment houses looked at the commodity markets as a subculture. Commodities were, basically, another branch of Las Vegas, just without the free buffets, dancing girls and booze. Actually, maybe some of that stuff was available on a daily basis, but it was a lot different then. I compare it to how Times Square was back in the 1970s and early '80s. If you ever visited the Big Apple back then, you know that Times Square was the worst of all things. It was a seedy, grimy, crime center filled with many colorful characters. Let's just say Times Square was not a place tourists went, unless, of course, they were sex tourists. Beneath it all, though, was an unpolished gem. The same is true with the resources market. Respect Is Earned Fast-forward to today. Imagine you're Rip Van Winkle and you go to sleep on 42nd Street back in, say, 1975 (let's call you "Rip Van Wino"). You wake up in 2008 and see all the porno houses gone, bars shut down, strip clubs a distant memory…and then, suddenly, you are escorted to a homeless shelter because of New York policies on street people near 42nd Street… Welcome to the new world. In some ways, this is true of the commodity markets, too. When I got involved with commodities in 1988, the exchanges were the low men on the totem pole. The members held all the exchanges privately, and none were traded on the stock exchange. It was a secretive world, and the only way to get a job on the floor was to know somebody. I got my job because my best friend's brothers owned seats on the floor and gave me a job as a clerk. Everyone on the trading floor was either related to or knew someone in the biz; it was a very incestuous market. The basic reason was that there was so much money to be made in the market nobody wanted outsiders coming in. It was a shortsighted approach, but it was the rule of law down there. The problem was that the markets stayed small and took only a small percentage of the global investment pie. As the early 1990s set in, commodities, basically, fell and/or stayed stagnant for much of the decade, except for during the occasional war, such as we had in 1990 and 1991 (oil went wild when Saddam Hussein invaded Kuwait). The general public focused on stocks and still pooh-poohed commodities. Nobody talked about corn or soybeans at any cocktail parties I went to in 1991. Now it's different. I must get 15 calls a week inviting me to speak about corn and soybeans at events or on TV. It's been a paradigm shift from 1989 to 2009. Bubblicious The most common question I have gotten on a weekly basis for the last 18 months is "When will the bubble pop?" My answer is pretty standard: "There is no bubble!" ~~~~~~~~~~~~~~Special~~~~~~~~~~~~~~ Better Than Gold! You've been told endlessly that gold is the best investment you can make in today's markets. While most of what you hear is true, there is still one investment that has gold completely beat. Click here to hear about what they haven't told you yet… ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I am not usually invited back to those cocktail parties, as it scares the guests. The truth is we are not in a bubble. We are in an upward correction propelled by years of denial, stupidity, underinvestment and neglect. The blame falls squarely on several parties. Wall Street is guilty for not embracing the commodity markets earlier. Wall Street should have allowed commodity prices to reflect the true nature of pent-up demand by making those markets available to its clients. Instead, Wall Street discounted commodities as some form of gambling. The commodities exchanges and traders are also to blame for not making their markets more transparent, and for also projecting an image of secrecy and mystery. And I could tell you stories about the underinvestment in basic production over the past couple of decades. Really, what were people thinking? That prices were low, and would stay low forever? Did it ever occur to anyone that all those babies born in the 1970s and 1980s might some day grow up and want food, energy and manufactured goods? No, this is not a bubble. It's a coming of age, a big, hard reality check that has been decades in the making. I have seen more activity by Wall Street in the resource markets in the last three years than in the previous 17. And I do not expect that it will ever go back to the way it was. I also don't expect to see 42nd Street filled with porno and hookers again, either. Change is often hard to accept. $140 oil, $1,000 gold, $8 corn…this is all the new reality. None of these new price trends are a figment of some rogue speculator's imagination or the products of evil activity. This is a wake-up call that our growing world is hungry for the limited resources it still has. The most important thing to remember is that markets, even parabolic bull markets, always correct. Those corrections can be painful if one is overextended or married to one side of the market — in this case, the bull market. So ride the wave of change, of course. Be flexible, buy on the corrections, sell for profits on the overdone rallies and vice versa. Go short when clear tops have been made (although I grant it can be hard to determine the exact top). There is no trail of breadcrumbs to follow on Wall Street, but that's why you have me to help guide you. As long as grains don't go up too much more, I should be able to supply you with a good trail to follow for many years to come, whether commodities are in rally mode or consolidation. Yours for resource profits, P.S.: So if you agree that high prices are here to stay, that means there is definitely money to be made in commodities markets. But how exactly do you begin? It's definitely a tough world out there, and the guys that have been in forever will try to keep the new guys out. That's why I'm offering you a guest pass into this market that will help you earn more than enough money to help you keep pace with these rising prices. Click here to learn more… |
Whiskey & Gunpowder Special Reports New "Backlash" Set to Rocket Oil Past $150...and Send Gas Soaring to Over $6 per Gallon The 10 Shocking Reasons for China's Pollution Problem Geothermal Energy: Investment in the Future Here's One Coal Stock That's Set to Skyrocket Investing in Exchange Traded Funds The Real Story Behind the True Gold Bull Market If someone forwarded you this copy, please look here to start your own subscription. Wanna let us know what you thought of today's issue? Now you can... click on this link. Whiskey & Gunpowder is a free e-mail service brought to you by a team of rebellious brigands. If you have not already done so, please click here to confirm your subscription. This will help us ensure you get every Whiskey & Gunpowder without interruption. Are you having trouble receiving your Whiskey & Gunpowder? You can ensure its arrival in your mailbox here. Please note: we sent this e-mail to lemmetry@gmail.com because you subscribed to this service. To end your Whiskey & Gunpowder e-mail subscription, click here. Nothing in this e-mail should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice.We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. © 2008 Agora Financial, LLC. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This newsletter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the World Wide Web), in whole or in part, is strictly prohibited without the express written permission of Agora Financial, LLC. 808 Saint Paul Street, Baltimore MD 21202. |
