The lazy and unimaginative media love to label anything that’s in an uptrend a bubble, with most of the populace believing them in a Pavlovian style.
But commodities certainly aren’t in any sort of bubble because nobody outside the financial markets has any idea that their prices have been rising, apart of course from the price at the petrol pump.
So a ‘bubble’ without the publics knowledge and participation is nothing more than an uptrend. And another reason why there’s certainly no bubble in the commodity markets is that you can now buy the following for less than they cost in May 2005 –
Natural Gas (down 2.70% year on year)
Soybeans (down 8.09%)
Coffee (down 8.13%)
Cotton (down 5.86%)
Summary
Bubbles by their definition must effect every sector and when you get a commodity product as fundamental and important as Soybeans losing value over a year it’s nonsense to use the B word.
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