[Sixstrings]

One word (well technically two) can describe what is going on in the electronic pre-market arena right now: inflationary hysteria. Gold is at a new record, wheat is surging, corn is at highest since 2008, crude at a new 30 month high, silver is at $41.10 - a new fresh post Hunt high, beans surging, etc, etc, etc. Essentially everything is bid, following news first reported on Zero Hedge that PIMCO is betting the farm that either inflation is about to go parabolic and force bondholders to dump everything, or that the Fed will have no choice but to pursue another round of QE, sending gold to $2,000 and unleashing the Weimar endgame.

Gold:


Silver:


OIl:


Corn:

Ugh, this is bad. The more inflation we have, the more money people pour money into futures (since that becomes a sure thing investment), but that spurs even more inflation. A vicious cycle, which central banks can't do much about because raising rates would explode interest payments on sovereign debt.

Not that I'm an expert or anything, just how I see it.

EDIT: I think I'm confused.. actually, it won't help if central banks raise rates because the problem is that the quantitative easing is fueling the over-liquidity. So they can't raise rates on one hand and keep printing funny money up on the other. Also, it's not all QE's fault.. obviously somethin's going on here, as in real commodity shortage and peak oil.

[Sixstrings]

There is nothing confusing about this at all. In a supply constrained market, oil drives commodity prices. Peak Oil constrains oil markets. Thus peak oil drives commodity prices.

Yeah but it's money that's flooding the markets.. this isn't just a peak oil problem, you have to account for all the quantitative easing money and all the taxcuts / giveaways to the rich. Corporations are sitting on piles of cash, and the rich have so much cash they can't possibly consume it all -- so they run up futures with it.

The one thing nobody with cash is doing is actually hiring Americans.

And lastly, another factor in this inflation is devaluing of the dollar. As the Fed forces the dollar down (their strategy), all dollar-denominated commodities go up.

[Pops]

Yeah, in '08 when this happened it seemed pretty simply money running away from Franken-mortgage-stein, what's it this time? Is it all QE?

From our good friends:

Goldman Sachs analyst Michelle della Vigna wrote last week that demand is already decelerating, although not as much as expected.

“The momentum of demand growth has fallen however – 2.3 million barrels per day growth in December falling to 2.1 million barrels per day in January and now 1.7 million barrels per day in February. Despite this, demand for the last three months is still 232kbpd above the current IEA estimate for that same group of countries,” she wrote...

But...

“We see clear evidence of inventories falling, with OECD crude and product days supply near their lowest level since end-2008.”

So do we see continued expansion or is it back to contraction?
Will my prediction of $138.99 oil by July 4th, with a subsequent crash come true?


Yesterday I sold 25 calves younger by far than I usually sell, even though grass is just now coming on and I have plenty. But, the price this week is higher than I've ever seen for Holsteins so I'm betting demand for bigger steers to go on feed will be down by fall.

[careinke]

A friend of mine, who lives in Oklahoma, is telling me their wheat crop this year is a total loss because of a lack of moisture. They are turning the cattle out into the fields. Our wheat-land in Eastern Oregon on the other hand seems to be doing very nicely. Plus wheat is over 9 dollars a bushel now.

[Sixstrings]

Plus wheat is over 9 dollars a bushel now.

With these prices, is farming more profitable than it used to be?

[careinke]

Well my "rent" checks are certainly bigger. Our cousin farms the land and we get a cut of the sales. His timing of sales is always brilliant.

[Loki]

A friend of mine, who lives in Oklahoma, is telling me their wheat crop this year is a total loss because of a lack of moisture. They are turning the cattle out into the fields. Our wheat-land in Eastern Oregon on the other hand seems to be doing very nicely. Plus wheat is over 9 dollars a bushel now.

Oklahoma has been in severe drought for quite some time, as bad as Dust Bowl times I've heard.

I wish we could send them some of our rain, it just keeps coming down. Can't get the tractors into the field. And we had a frost last night, too. Dang weather.

My boss said he isn't going to raise the prices of our veggies, but we'll see. He'll probably add a fuel surcharge like he did a couple years back. Diesel is well over $4/gal already, and it's still going up.