the state of commodities boom, bubble or bust? julia e. bussie, cmt money mentor solana beach, ca...
TRANSCRIPT
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The State of Commodities
Boom, Bubble or Bust?
Julia E. Bussie, CMT
Money Mentor
Solana Beach, CA
October 9, 2004
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Commodity Research Bureau – CRB Index
Is It Over?
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Headlines
• “Looking for the Next Bubble” – Feb, 2004• “The Great Commodities Bull” – Feb, 2004• “It’s a Bubble” – April, 2004• “You Too Can Tap Gushing Commodities Prices”
– June, 2004• “Explosion Ahead for Commodity Prices” – July,
2004
• “A New Secular Bull Market” – Sept, 2004
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Bull Markets Topping in 2004
March• Soybean
Oil• Copper
April•Corn
•CRB
•Gold
•Platinum
•Soybeans
•Soybean Meal
•Silver
•Wheat
May•Gasoline
•Lumber
•Hogs
•Pork Bellies
June•Feeder Cattle
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Bear Market Rally Highs2004
March• Oats
April•Palladium
May•Dollar
•Natural Gas
June•Live Cattle
August•Cocoa
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Odd Men Out
• Orange Juice• Cotton• Sugar
Still Bullish
Crude Oil and Heating Oil
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Non-specific Fundamental Factors
• Fear
• U.S. Dollar
• Globalization
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Globalization Factor - China
• Population
• Land mass
• Arable land
• Fresh water
• Oil
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Population -Over-riding factor
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1400
0
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1400
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Chinese Demand
• Cement• Steel • Iron Ore• Coal• Aluminum• Oil
• Copper• Platinum • Grains• Soybeans• Cotton• Meat
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Supply has a way of compensating for demand.
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• Improved efficiency
• Scientific advances
• Innovations in production methods
• New mineral exploration
• Recycling
Response to Higher Prices
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Gold Annual Production
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Source: IMF Staff Papers, 2002 Paul Cashin, C. John McDermott
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The Big Picture
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Questions?