Bubble, Bubble, Toil and Trouble Coming for Commodities

Bubble is the word that defines any asset that is overpriced because of investment hysteria. Right now all commodity's prices, other than gold and silver which are really currency hedges, are rising far faster than their real 'value' because of renewed speculative activity which keeps pumping up the commodity bubble. There’s a lot of money going into the commodities market and that drives prices through the roof.

Particularly mind numbing is the number of pension funds throwing cash at the commodities market. Pension funds, already hit hard back in 2008, seem determined to make the same mistakes again. Pension funds are under pressure, mandated, to invest. Millions of new dollars flow into their coffers from the paychecks of workers each month and fund managers must produce quarterly profits or perish. Then there's the securitization of commodities, works almost exactly like the securitization of mortgages did during the last bubble, which is the latest of Wall St.'s billion dollar 'free lunch' schemes.

The commodity bubble, like all bubbles, will eventually end. When it does the entire house of cards is going to come crashing down and we are going to experience a very bitter economic collapse. As Guy McPherson says, "You and I didn’t start the fire of empire. But we’re about to see it extinguished."

i don't play carnival capitalism personally, i'd just as soon stick to roulette, but it does piss me off that millions of people who have worked hard all their lives while looking forward to their retirement will once again take a shit kicking when this bubble bursts. The speculators and the banks borrow money at nearly 0% and use it to blow bubbles, they take the 'profits', dividends and fees as the bubble expands then, when the music ends, the security's owner-the pension fund- inherit's the wind.