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Veteran Advisor

Reassessment for 2011

It is sometimes easy to talk yourself out of the simple conclusion and hence to ultimately be wrong.

 

But I am wondering about my thought that the 30 year commodity cycle high will be significant, and probably right here.

 

I do think we're at the point where the Euro begins its death dance, soon, and that as it happens the dollar will rally and stocks and commodities will move lower.

 

But all of this is so political and just like the hugely deflationary forces in the US (and global) economies, it will be fought tooth and nail.

 

Governments and central banks have a lot of power even if the market ultimately has more. So it will be enormously hard to trade.

 

But I'm thinking that the euro decline intensifies sometime in the not too distant future but that ultimately the core countries cave in and back the debt of the periphery. In that case, the forces of the market will probably turn on the USD full bore. Not that it doesn't deserve it but thus far it has been the best of a horrible pick among the major currencies.

 

That would probably allow for new commodity highs.

 

The alternate view is that the Germans et al don't blink at the abyss and the whole thing comes apart. In which case I assume it is September 2008 all over again but without a bailout.

 

In which case I guess I could come back and say "I told you so" about a major commodity high in this time frame.

 

With my arse now fully covered I could make a heck of a marketing advisor.

 

Good 2011 to all, h

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13 Replies
Veteran Contributor

Re: Reassessment for 2011

Atleast you are not charging for your marketing newsletter...

 

The market should get nervous looking ahead to the Jan. report.  The memories of last years debacle are still fresh.  Tops are always short.  Bulls just can't keep it up for long.

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Frequent Contributor

Re: Reassessment for 2011

hardnox,  points are well taken.  The only thing that can be said with near certainty is that volitiliy is in our future. 

 

Political uncertainty, currency issues, potential continued global weather concerns, fuel and other input costs, broke and desperate governments, fractured public opinion, staggering debt and budget shortfalls with poor prospects for national income.  Uncertainty and volitility is the word. 

 

The only thing I can say, is people still have to eat, I think.

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Veteran Contributor

Re: Reassessment for 2011

How are we going to make new highs if the usd rises that would kill export demand ?

 

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Advisor

Re: Reassessment for 2011

Nox, have you given any thought to entering the political arena?

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bullrider685114
Veteran Reader

Re: Reassessment for 2011

The Lull Before The Storm: What’s Coming in 2011
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Senior Contributor

Re: Reassessment for 2011

I am not even in the same galaxy as some of you in outlook. It seems to me that the world is more complex and more stable than the general belief. In fact, I believe it is more stable BECAUSE it is more complex. And there is a reason ag has been spared much of what the rest of the economies have experienced. Because it isn't part of the industrial cycle to nearly the same degree as most any other product.

 

But there are other contradictions to coinsider. We seem top be shaken by the rise of the power of China, yet not absorbing some of the information about China's dynamism. Many would like to believe it is a hollow shell (a form of self delusion IMO). IMO it certainly is not.

 

Ponder this. Who is the globe's leading exporter? China - of course. Do you know who the second largest exporter is? You should know this if you're pondering the fate of the world or it's economy. It's a country many would say should has many disadvantages, yet it performs well. No, it's not us, for all the advantages we say we have - when we aren't busy saying we're on the way to hell in a handbasket. They have less than 1/3 our population.

 

We need to be learning lessons from looking out, not staring out our own navel and thinking the answer is always here - because it isn't. And then saying we are destroying ourselves - which we aren't. We have given it a fair try though.

 

The ag market is dependent on the production/demand/inventory cycle, and we are always one season away from a new start. But it's never a industrial cycle in the mold of widgets. Never.

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Senior Contributor

Re: Reassessment for 2011

    You guys that eat,drink,and sleep negativity must realy be hard to live with.Inflation is inevitable,don't beleive it,watch your fert and fuel bill late 11 through 12.Your blessed with a bullish atmosphere that has rallied most agriculture commoditie markets and more to come.Numbers that will work for the current cost of production,but in your minds the sky is going to fall.Could be,but not because of any near term plenty of ag commods.I guess that realy makes many of you just armchair politicians!

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Veteran Contributor

Re: Reassessment for 2011

Palouser, I'm with you.
Complex interactive globe.
Not in the usa, but offshore now EVERY grain of sand COUNTS so to speak.

Truely a SOLID DEAL due to the afore 2 reasons.

1st largest global manufacturer / exporter was East Germany till just recently ( now it's supposedly china ).

Think I'll stick with the E Germans. Quite statistic size and pop considered.

I figure the usa just a "follower" along for the global ride.

Granted as far as agri exports, usa will be the leader ( that's how they fix their trade / debt imbalance .... gonna take along time even if they stopped over spending yesterday).

EU deal....gonna get nothing but better. See a boom there...not a bust.

Big driver as far as some of the recent up? Likely the flood in Pakistan.


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Re: Reassessment for 2011

east germany??  the berlin wall fell in 1989 and germany was unified in 1990.  it was in all the papers.

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