Sunday, May 15, 2011

Starbucks (SBUX) CEO: Agricultural Commodities are a Bubble

"Right now we are experiencing a very strange and almost inexplicable phenomenon in the commodities market. Without any real supply or demand issues we are witness to the fact that most agricultural food commodities are at record highs at once, and coffee is at a 34-year high," he said.

7 comments:

Jmperry said...

It's interesting to see that open interest has surpassed its 2008 highs for corn, wheat, and soy, yet all three are below their 2008 price highs. It looks like commodity speculation is experiencing diminishing incremental returns.

Jmperry said...

Silver speculators take a bath

http://worldhousingbubble.blogspot.com/2011/05/warehouse-financing-scam-in-china.html

Depending on how widespread this is (and anecdotally it looks very widespread) this could cause a tidal-wave selloff.

CP said...

That is interesting. I am going to look at GSI, a Chinese steel company, as a short idea.

Stagflationary Mark said...

For what it is worth, I toggled back to deflationary today.

CP said...

Yes. The dollar is about to cross above its 100 day MA, T bonds bounced up off support on Fri, and equities are below the 10 day MA. This is looking like the beginning of a strong deflationary trend.

CP said...

Your post was good BTW.

Deflation will be a refreshing change. Hasn't inflation gotten tedious?

Stagflationary Mark said...

CP,

Deflation will be a refreshing change. Hasn't inflation gotten tedious?

I-Bonds bought today pay at a 4.6% annual rate for the next 6 months thanks to hindsight inflation (with a 0.0% fixed rate over inflation).

I-Bonds can never deflate, even month to month but yet are still tied to inflation as it appears.

In theory, 0.0% I-Bonds can therefore pay more than 0.0% over inflation if we keep toggling between inflation and deflation.

I still like I-Bonds.