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BACK TO BASICS
I have been buying natural resources since 2001. Back then, commodity prices were the cheapest ever in the history of capitalism and tangibles were not on the radar screen of many investors (they still are not). Fast forward to early 2008, where prices of resources are heading to the heavens, money is starting to pour into the sector and investors are beginning to take notice of the boom. So, where do we go from here? It is my observation that the current bull-market is still in its early days and fundamentals indicate that we have a long way to go.…
20Jun2008 | Daily Reckoning | Comments Off | ContinuedTHE DECLINING QUALITY OF DOLLAR MENUS
Speaking of inflation, Michael Pento of Delta Global Advisors reported that McDonald’s, the fast-food giant, “stated it has no plans to tamper with its highly successful dollar menu, which accounts for 14% of the company’s sales.”
Naturally, Junior Mogambo Rangers (JMR) everywhere laugh mirthlessly at the concept that McDonald’s, or anybody else, would sacrifice profit by not raising prices to offset higher costs.
Mr. Pento is careful not to agree with me about motives or anything else I say, and writes instead that the problem of higher priced food is becoming universal, as “Indeed, the price of food ingredients has risen sharply…
10Jun2008 | Daily Reckoning | Comments Off | ContinuedCorn Rises for Eighth Straight Month, Pitting Ethanol Use Against Global Hunger
Against a backdrop of soaring worldwide food prices, riots over shortages and controversies about food crops being diverted for biofuels, U.S. corn prices jumped another 7% in April, the eighth-straight monthly advance.
And the worst may be yet to come: Despite the rocketing price of corn and calls to step up production of corn-based ethanol, farmers intend to devote a bigger percentage of their acreage to more-profitable crops such as soybeans and wheat.
“Compared with soybeans and wheat, corn is still bullish as people expect the acres in the U.S. will fall following planting delays,” Kenji Kobayashi, a grain analyst at Kanetsu…
1May2008 | Money Morning | Comments Off | ContinuedU.S. Consumers Destined for a Future with Fewer Choices, Much-Higher Costs
Recent high-profile bankruptcies of mainstay American retailers, such as Sharper Image Corp. (SHRPQ) and Linens Holding Co.’s Linens ‘n Things, as well as the proposed mergers between Blockbuster Inc. (BBI)/Circuit City Stores Inc. (CC) and Delta Air Lines Inc. (DAL)/Northwest Airlines Corp. (NWA), and the admissions from the nation’s leading student lenders that their business models are no longer viable, mark the beginning of a long overdue overhaul of the American economy. In short, the economy will be getting smaller and more expensive.
The success of all of these seemingly disparate sectors depends, to a large extent, on the ability of…
23Apr2008 | Money Morning | Comments Off | Continued
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