With the rapid sinking of the US dollar relative to other foreign currencies, investors who can read trends and are students of history are looking for ways to make their capital grow. Housing and esoteric debt products have burst the way the stock market bubble burst in 2000, and the normal business cycle may have turned into a cycle of repeating bubbles, with strong inflationary trends.

As always, the process of investing is one of making carefully researched bets on things – selling assets when they’ve appreciated in value and buying those you think will rise in time. With the declining dollar, and risks of a recession, coupled with the Fed cutting the prime rate to banks as part of a staged bail out of the mortgage crisis mess, the trend lines make commodity trading appealing.

Commodity trading is simply buying commodities (such as gold, or silver or platinum) as a tangible asset. When inflationary pressures are strong (and interest rates are low), these can give a better return on investments. For example, in 2003, oil futures were trading at $25 per barrel; now they’re trading at roughly $95 to $100 per barrel.

When you buy commodities, you are generally buying a piece of paper saying you own something and have the right to re-sell it, rather than taking physical delivery of goods. This can cause commodities markets to be quite volatile and subject to events in the world – for example, oil went up when the US invaded Iraq; it went up again when terrorists were caught in the Saudi oil terminals…and right now, while oil is priced very high, there’s also lax capacity at the refineries in the US, which is a strong indicator that oil’s current position is a speculative surge.

Other commodities to look into for trading are precious metals; when inflation hits (and we’re in the process, with the Fed cutting rates, of starting an inflationary spike), precious metals tend to be one of the major categories of investment that’s gains outstrip the rate of inflation. However, like oil, there is a severe risk of a speculative bubble, as happened in the early 1980s with the Bass brothers and the silver market.

Lastly, the environmental crises being touted in the media and the demand for “green” biofuels are causing a huge surge in the price of corn, where the subsidies for planting corn for making ethanol for E85 gasoline outstrip the price of growing corn for crops by a factor of four. While this is going to cause rises in prices for food (a major drive of inflation), it also means that commodity trading in corn, soybeans and other agricultural crops is a viable investment.

The general advice in commodities trading is that when your asset reaches the price point you want to sell at, sell at least half to realize your gains, and sell off the other lots over the next two weeks in chunks of 5 to 10%. Like a high stakes poker game, commodity trading rewards those who know when to leave the table rather than be held to the siren lure of the ever growing pot.



By: Craig Thornburrow

About the Author:

Caffeinated Content

— asked:


I think the Tribe should try to deal Jhonny Peralta, Paul Byrd, and Casey Blake at the trading deadline for whatever A, AA, or AAA prospects they can get. Rather than building up the farm system for two years down the road, I think they should build it up to make it a hot commodity in the offseason.

In the offseason, I hope the Indians eye a true leadoff hitter such as LF Juan Pierre. The best scenario would be to add a player such as 2B Brian Roberts, who could leadoff for the Tribe. 2B is a huge whole for the Indians, considering that Asdrubal Cabrera is the SS of the future and Josh Barfield is a huge question mark.

If Matt LaPorta is ready for next season, and the Indians acquire a leadoff OF such as Pierre, the batting order would look much better. I really think the Tribe should also try to deal 1B Ryan Garko for some bullpen help in the offseason. The addition of Brian Roberts would be fantastic, but Pierre is a more realistic one.
the batting order may look like this with Pierre and LaPorta:

1 – Juan Pierre – LF
2 – Asdrubal Cabrera – SS
3 – Grady Sizemore – CF
4 – Victor Martinez – C
5 – Ben Francisco – RF
6 – Travis Hafner – DH
7 – Matt LaPorta – 1B
8 – Andy Marte – 3B
9 – Josh Barfield – 2B

This is factoring in Garko, Blake, and Peralta are traded. Shin-Soo Choo could also be dealt if Pierre is acquired. Help is still needed at 2B, so the farm system or Choo could help in a deal there. If Hafner falters, Francisco or LaPorta could become the DH, in which case another bat would need to be added.

The turnaround is possible but it will not happen if GM Mark Shapiro thinks the team he has is good enough and does not act accordingly.

DLG asked:


I’ve read alot of questions on this board about should the Leafs trade Sundin? Will they trade Sundin?
However I post this question:
Mats Sundin says the Leafs organization means the world to him (not his exact words). Do you think that with the turmoil the Leafs are in that Sundin should probably do what’s best for the Leafs future and waive his no-trade clause? Even though he is the best Leaf on the ice every night, he is getting up in age. Should he test the market while he’s still a hot commodity in the league? The Leafs can get alot back in return for for Mats that can help them rebuild for the future. Plus he can just do what others have done and resign in the off season (unless the league finally cracks down on that). What are your thoughts?
playboyperry509: If you read the question properly I’m asking if you think Mats Sundin should do what’s right for the organization and wave his NTC, NOT WILL THE LEAFS TRADE HIM.
Bob: If you say it’s reached that, then would you consider Sundin selfish in that respect? He wants to stay in Toronto and win a cup, but the need to rebuild that team so he won’t be getting that cup anytime soon. Would you say he’s putting himself before a team that if they dealt him would be rewarded hansomely in doing so?

bossmanX asked:


By *SCOTT KILMAN*
September 28, 2007; Page A1, Wall Street Journal

Rising prices and surging demand for the crops that supply half of the
world’s calories are producing the biggest changes in global food
markets in 30 years, altering the economic landscape for everyone from
consumers and farmers to corporate giants and the world’s poor.

“The days of cheap grain are gone,” says Dan Basse, president of
AgResource Co., a Chicago commodity forecasting concern.

This year the prices of Illinois corn and soybeans are up 40% and 75%,
respectively, from a year ago. Kansas wheat is up 70% or more. And a
growing number of economists and agribusiness executives think the
run-ups could last as long as a decade, raising the cost of all kinds of
food.

In the past, such increases have been caused by temporary supply
disruptions. Following a poor harvest, farmers would rush to capitalize
on higher crop prices by planting more of that crop the next season,
sending prices back down. But the current rally, which started a year
ago in the corn-futures trading pit at the Chicago Board of Trade, is
different.

What’s changed is that powerful new sources of demand are emerging. In
addition to U.S. government incentives that encourage businesses to turn
corn and soybeans into motor fuel has affected the supply of corn and soybeans for animal feed, and the growing economies of Asia and Latin America are enabling hundreds of millions of people to spend more on food, especially meat and milk.

1) How does the U.S government incentives to turn corn and soybeans into motor fuel affect the price of beef? Explain

2) How do the growing economies of Asia and Latin America affect the price of corn and soybeans? Explain

WinonaGal asked:


An acquaintance wrote this and I thought I would put it out there to see what people’s opinions are of this bill.
I have been challenged with explain exactly “What is Cap and Trade” and I am amazed that very few people that I know has any idea what is in this magical black box. Since this bill has passed the House and is soon to be voted on in the Senate, I would like to make my best effort to explain what it is.
Specifics and formulas have not been worked out to my knowledge so the examples below are not to be taken face value but should get you pointed in the right direction.
Every individual in the United States will be given a set value of acceptable carbon footprint. Every function whether it is purifying water, keeping your house cool, driving your car uses energy. Energy usage through mathematical formulas can be converted in to carbon output. For example, water is pumped from Lake Meade, sent Through processors and filters. Chemicals are added and the water is pumped to your home or business. The pumps from the lake take energy, the processors take energy, the chemical factories use energy to produce the chemical, the water is used and has to be treated back to its original state. The byproduct of all this energy is carbon.
Now we get down to how this is applied to you and your life. Every household will be monitored as to how much power, water, waste, gas, fuel…..to determine if they are over or under their allotted carbon footprint. Believe me the values are not high for example: Water usage-Showers not to exceed 3 minutes per day using a low flow shower head. Flushes using a low flow toilet to be limited to a set number per member per day. Dishwashers, baths, and normal laundry, landscaping and swimming pools will put you over your limit. Let’s just consider them luxury items and you have to pay more for using them.
Electricity gets a little more complicated but follows the same principal. Every household will be allotted so much electricity per resident. The value will be set around 250 square feet of living space per person living in the residence. So a family of four will be allotted 1,000 S.F. of living space and the electricity to light it using energy efficient lighting a limited number of hours per day, air conditioning or heating to climate control the living space at 860F in the summer and 670F in the winter a limited number of hours per day. They will probably throw in 3 hours of TV and some power for small appliances.
Your car, you will be allotted a certain number of miles to drive per week and they will be based on average commute to and from work along with a few errands and necessary trips. If you go over your miles, then you will have to buy carbon credits.
Now, who is going to determine your allotted carbon footprint? The government will and they will also monitor it. So you can save some carbon credits here and spend some there but at the end of the year, you will have to square the account to zero.
Where will you buy carbon credits? Not everybody has a car, air conditioning, 250s.f. per resident and they will have carbon credits left over. Now you just have to buy them. Another example: An inter-city mother of 4 children living in a 550s.f. apartment with no electricity and no daily commute will have ample carbon credits left over and she can sell them to an exchange. We will purchase them from an exchange along with a processing or administrative fee to the exchange.
The intent of the Cap and Trade Bill is the following:
People and individuals who have excessive carbon footprints as determined by the Federal Government will have to make every effort to reduce their standards of living or pay a yearly fee (tax) to keep it. Public transportation is one way to conserve, using public restrooms, laundry facilities, city pools….
The second is that less fortunate households, with many members living under one roof, will have a commodity that they can sell to the more fortunate citizens….otherwise known as “Trickle-Up Economics” or “Redistribution of Wealth.”

If this is so, what do you think is right or wrong? What do you think is fair or unfair? Do you think our government has any place stepping in to your life in such a way? Do you view this as intrusion? How much do you think that implementing something like this would cost?
Again, I did not write this, but I would love to see what people here on YA think.

zxfsdfas asked:


$12,000

My aunt and I plan to do something together with my money. Since I cannot trade that much yet because of my age, I decided to let her manage my money, she is very knowledgeable about trading and investing. She’s the Investor Relation Officer of a very well known oil company, I’m not telling you which one hahaha….

so here we plan to invest $12,000 of my money to a foreign country, we can’t decide yet,maybe some country that we have connections, we plan to invest it on commodities especially rice, rice is very much in-demand in some countries that are not developed countries

She told me that we can buy rice and hold on to them for a month or so…….. then that can yield me up to 15 pecent after a month or two= 13800 approx. after each selling month…

my question is where else can we invest… I’m thinking about stocks.. stock prices are very low these days… so we thought it’s a good idea to do both commodities and stocks…

im asking for opinion

is stock trading these days good-or-bad?

thanks..

state your trading experience please
you guys won’t believe it… maybe you should get some info’s regarding prices of goods in different countries especially in 3rd world countries…. it’s really really rising…

biztone asked:


Does anyone WHO ACTUALLY TRADES with REAL MONEY (preferably commodities and futures) use floor trader pivots? The pivot is roughly calculated by taking the high, low, and close and dividing it by three right? How are the supports and resistance level calculated from there? Also, what time increments are you watching while in a trade and using this indicator?

Freddie asked:


From March 2007 to March 2008 Americansdrove 11billion fewer miles than the previous year. Not only that, we’re using a lot less oil because we using alternative fuels like E85 and trading in our gas guzzling SUVs for Hybrids. So, I ask the question Why is gas $4 a gallon now? Why isn’t the whole “Supply and Demand” thing working with oil? It’s quite obvious that this is a conspiracy. I keep hearing about China and India buying up all the oil and oil is a global commodity and that’s why Americans aren’t making an impact. I don’t understand why we don’t keep our oil a domestic commodity and tell OPEC that they can keep their oil. We need to stop buying foreignoil and start tapping into our own oil reserves. I’m all about preservation, but when families are going hungry because they have to pay $150 a week for gas to get to work then we need to tell the environmentalist to step out of the way because making people go hungry is a lot worse that killing a couple of trees and a few birds.