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IBDvalueinvestin (98.52)

Next Monster Bubble Identified by Jack Lifton



September 08, 2010 – Comments (6)

In his opinion the next big bubble "Commodities Inflation" an inflation of the likes the world has never seen. I can see it building already but its at the very earliest stages at this point. In my Opinion it will take another 5 years minimum and maybe 10 before we get to a bubble situation in commodities. There will be lots of folks that get rich quick on this next bubble of the future and alot of folks "retail that enter between 2015-2020 will also lose big once it gets too high and the demand craters". 


 Jack Lifton said today in Asia:

"If China’s growth rate were to continue at 8%, then its demand for all metals, current at 53-56% of all metals produced in the world, could shortly rise to a level where the existing productive capacity of the world’s metals economy cannot increase any further, due to capital, equipment  and skilled personnel limitations of availability. When this point is reached, the first result will be an intense commodity price inflation the likes of which the world has never seen. This would of course in the long run be demand-destructive, and prices would ultimately crash in a world-commodities, price-led recession, but the economic and political danger of such a series of events is sobering and a little frightening,

China recognizes this possibility much better than Western economies do, still mired in recession due to the credit bubble. China fears most of all a commodity price inflation, and a renminbi appreciation, either or both of which could damage its economy or slow or even stop its growth."


6 Comments – Post Your Own

#1) On September 08, 2010 at 10:13 PM, ChrisGraley (28.58) wrote:

It's a myopic opinion.

Yes as prices go higher, global demand will go lower, but China's demand won't decrease until their economy does. What this means is that after a huge spike in price, China enjoys price stability. (maybe high price stability) When consumers are price conscious, the lowest cost producer will take over the market. As the higher cost producers flee, the demand subsides and the low cost producers remain to enjoy better margins until they cut them again to compete with higher cost producers trying re-enter.

I'd agree if he said there was a China bubble, but there is no commodity bubble. There will never be a commodity bubble. Paper commodities yes, actual commodities no.

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#2) On September 09, 2010 at 2:52 AM, Valyooo (32.77) wrote:


Don't you think gold could one day become a bubble?

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#3) On September 09, 2010 at 2:52 AM, Valyooo (32.77) wrote:

Considering tulips were a real and not paper bubble?

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#4) On September 09, 2010 at 7:58 AM, ChrisGraley (28.58) wrote:

Money will one day become a bubble, but not gold.

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#5) On September 09, 2010 at 9:36 AM, Valyooo (32.77) wrote:

I know money will become a bubble ( I think it currently is) but why not gold?   Gold holds its value against inflation, but once people start seeing it move up a lot in price, and people that have NO understanding of money/inflation/etc start clamoring into it at whatever price possible it will possibly outpace inflation and then become very extreme and then pop, and settle back down.

Commodities have become bubble before, right? (This is a legitimate question, I dont have too much info on bubbles other than RE and tech stocks and treasuries)

Other than that i agree with what you have said

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#6) On September 15, 2010 at 11:19 AM, IBDvalueinvestin (98.52) wrote:

The coming commodities bubble will be like none the world has ever witnessed. 


Jack Lifton's words..

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