The Upcoming Top Fool Will Be a Commodity BEAR
: Commander #1 We've analyzed their attack, sir, and there is a danger. Should I have your ship standing by? : Governor Tarkin Evacuate? In our moment of triumph? I think you overestimate their chances.
Gov Tarkin held his position, the Empire had destroyed approximately 27 of the 30 rebel fighters, it seem logical to stand fast. But there was a risk. Darth Vader sense it. He grab two tie fighter pilots and rolled out to meet the threat. Vader engaged the rebel pilots and took out Two, Five and Gold Leader. Red Five made his attack run turned off his scanner and made a "one in a million" shot that destroyed the Death Star.
Like Vader I sense danger in the commodity bubble. I have closed most of my commodity longs. So it will go for the First Commodity Bears, who attacks the Commodity Bull. The first ones in will be killed (ref my MOS, MON, POT calls). The guy, who times it right here in CAPS will be a hero and Top Fool, the way the previous Top Fool arrived by underperforming all the homebuilders and residential real estate.
Many that shorted NASDAQ stocks in 1998-99 were out of cash or bankrupt before the NASDAQ bubble popped. The commodity bubble might have more up side, but long commodities and short the US dollar is one of the most crowded trade in the world today.
But eventually the commodity bubble will be popped. The commodity bubble is the last bubble left by the reckless Central Banks monetary inflation and government overspending. When the commodity bubble pops, like the DeathStar explosion, you had better be clear.
If Obama increase Capital gains tax or Congress reviews/rewrites the legislation in regards to commodity speculation, the commodity bubble might start deflating.
Mish Shedlock writes about it here: Quantifying Commodities Speculation
Three charts to see:
1. Commodity Index Investment vs. Spot Prices http://bp0.blogger.com/_nSTO-vZpSgc/SDwwpsrA_WI/AAAAAAAACok/KXFdcp3C00k/s1600-h/Commodity-Index-Investment-1.png 2. Commodity Index Purchases Last 5 Years http://bp3.blogger.com/_nSTO-vZpSgc/SDwxdcrA_XI/AAAAAAAACos/o-hN0udv-7Q/s1600-h/Commodity-Index-Investment-2.png 3. Commodity Futures Market Size
Of interest Enron's biography Smartest Guy in the Room, I will write about it later.
The Smartest Guys in the Room - California and Traders
The Smartest Guys in the Room - Jeffrey Skilling