Gold/Silver, Energy, Agriculture
This is where I think we see the inflection point for commodity stocks vs. consumer discretionary, real estate, financials, banking, housing, entertainment, etc. I could be way wrong, but I think the investment community will ask this question:
"What can I buy that is worth something?"
Oil hanging around $89, Gold $862, Silver $15.60, Corn near $5/bshl, wheat $10, Soybeans $13, potash $400/ton, MAP $700ton, etc. etc. All very near if not at all time highs with more room to go adjusted for inflation. It seems to me that if markets look ahead, and discount the future, a huge crash in these prices would be under way IF we were going to have a "normal" recession.
I am sure the FED is going to slash interest rates and crank up the printing presses to "re-flate" the banks/economy. This should cause the dollar value to decline more, and inflation to go up.
Chart after chart shows global inventories of grain, oil, base metals, etc. at historic lows, not highs. Interest rates are low, unemployment is lower than past recessions. This is not a recession brought on by excess prodution/inventories leading to job loss and drying up of investment. This is a financial crisis recession brought on by insanity in the financial world, and over valuation of real estate/lose lending. We still have to eat, heat homes, and drive to work.
The Chinese have moved too many people to the cities and started too many capital projects to pull the plug today. The powers that be will do whatever it takes to avoid the population taking to the streets.
I am buying companies on this sell off that are dramatically increasing production, and benefiting from strong prices of their products. Also gold/silver will benefit as global money supply reaches insain levels.
We shall see!!!!! Fasten seatbelts for the rest of the week!!!!
Good Luck!
Kipp
