07.27.06
Commodities | Oil that glisters | Economist.com
Commodities | Oil that glisters | Economist.com:
Other analysts see parallels with the dotcom bubble of the late 1990s. After all, plenty of people are opining that “things are different this time”. Pension funds and individual investors are keen to get in on the action. CalPERS, America’s biggest pension fund, is due to decide soon whether to put money into commodities. If such a conservative operator is eyeing commodities, cynics say, then a correction must be close at hand.
Jim Rogers opened a commodity index in ‘98, just before he went on a 3 year trip around the world. He talked about the commodity boom that had already started then, and it’s still going. This article in the Economist questions if the boom is coming to a close. How much of the rise in commodity prices is due to shortage and how much is due to the inflation that gets massaged away in the BLS’s “hedonic adjustments” to the CPI? Bernanke must get to see the real numbers, so up the interest rates go.
