The next bubble: commodities
The commodity “bubble is about to burst,” says Jim Ostroff in Kiplinger.com. Prices for oil, grains, and metals are “unsustainably high,” and “our best estimate” is that this “balloon will deflate by midsummer.” Investors have pushed commodity prices “way out of whack,” mostly because other investments seem less lucrative these days. This “froth” accounts for about a quarter of the cost of $110-a-barrel oil, for example. The “bottom isn’t going to fall out,” but when any of these four things happens—lower demand, big stock market gains, a stronger dollar, or signs of low inflation—you can expect at least “gradual” deflation. Unless you’re a big speculator, that’s good news.
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