Commodities are the place to beIn my post of yesterday, I was using Peter The Great, in symbolism. In that he defeated the rulers of the day ( Kings of Sweden) to establish Russia as a global power. This was interrupted by communism, but Russia is emerging as a pre eminent global power.
I was using this as a reference to current market conditions in commodities.
I strongly recommend that investors stay long commodities as a long term investment strategy.
In terms of commodities, the present housing crises and the current FED and European financial policies are somewhat insignificant, to the real long term events of the world. They will be recorded in history as insignificant events.
We are in a Geo Political super global bull market in commodities.
China, India, Brazil and Russia are all in a global race to establish the next world order. No western financial FED or ECB policy is going to stop these countries racing to establish the future world order.
I was using Peter The Great to represent these countries. These countries are over throwing the current world leaders.
China, India, Brazil and Russia will use up a gigantic amount of commodities to establish themselves as the next global powers. In historical terms, USA will probably end up like Great Britain.
Commodities are going to be in continuous short supply for the next 20 years. It’s going to take 15 years of massive capital investment to supply the commodities needs of the future.
The future world order will probably be, Brazil, India, China then Russia. Brazil probably has the edge because of its large oil reserves and India has democracy.
The real problem, is that none of these countries trust each other and probably the west, trusts them less. So each country has the same solution; that is to be the first in the race to be the next super global economic power.
Countries that have commodities are being very protective of them and I suspect this will happen more and more.
Imported commodity inflation into western economies is going to be a long term problem. The FED and ECB policy of demand destruction by higher rates will probably fail, because the democratic have nots, will demand their heads. The recent German economic numbers, will get the knife sharpeners out, the ECB bankers will probably sent on vacation. How can you get demand destruction, when 3 Billion people are trying to become middle class all at once?
The only solution to the current commodity inflation, is to expand capital investments into the commodity industry. Higher interest rates actually stops that happening and makes it worse.
Probably gold will find a new global public respect that has been missing for a long time. Long term the dollar will fall and gold will probably rise as many predict.
Commodities are the place to be.