Commodities Today

I just read a great blog entry at Moolanomy about commodities.  Commodities have been creamed liked everything else in this latest stock market cliff jumping exercise and everyone should have a) some education about what they are b) a bit of them in their investment portfolio.

As you no doubt know by reading my blog, I am partial to precious metals which are a different sort of a bird when it comes to the more basic commodities such as oil, wheat, lead, etc. due to their significant inherent value (in small quantities).

Anyway, one of the prevailing schools of thought (by Jim Rogers and other commodity gurus) is that we are seeing a goodly amount of supply side destruction on the part of the people and companies that actually product the food we eat, basic industrial metals, etc.  Rogers in particular is fond of saying “farmers cant get loans to buy fertilizer and nobody is going to be building a zinc mine anytime soon.”  When things get back to normal, the proverbial cupboard may be bare when we need wheat to make bread.

Bottom line is that commodities could soar when the inflation you know we are going to have comes pounding on the door.

Read the referenced blog …  good stuff.