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Global Commodity Parabolic Price Rise Bubble or Real- Is it Really Different This Time

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The rise in global commodity prices is fueling inflation everywhere particularly in developing countries where food and energy forms a major percentage of the inflation basket.This has forced countries like India and China to accelerate interest rate hikes to cool down inflation.Rising Food Prices has caused distress in a number of places leading to food riots in Africa and have been said to be a leading cause of the revolutions in the Middle East.Oil Prices continues to increase unabated as dollar decreases with US Money Printing.Commodities are touching new all time peaks as rising global demand,finite resources,money printing by developed countries fuel price hikes.Silver has been increasing in a parabolic manner with other commodities too showing heart-stopping jumps in prices.The rise in global wheat,rice prices has been at a record as well.Almost all commodities have seen sharp prices increase.

Grantham has made a famous call that the rise in commodities is not a cyclical phenomenon but a secular long term one.He says that the rise in commodity prices is different from the past.Note Grantham has done an extensive study of bubbles and is one of the leading minds in the investment community.While every time in the past,the statement “this time is different” has led to a crash,Grantham’s call cannot be taken lightly.He says that the rise in population,shortage of resources,the growing consumption power of massive chunks of prosperous citizens in India and China will lead to a continued surge.Note commodity prices have declined secularly in the last century and since 2000 have managed to erase all their losses to form new peaks.Grantham also says there is a possibility of a massive short term decline which will give a historic opportunity to load on commodities.Jim Rogers is the most famous commodity bull and now Grantham has joined him.Note famous hedge fund managers have already made huge bets on gold and are winning currently.Note CIA and German Military are already on the record for calling Peak Oil which would lead to a drastic fall in living conditions worldwide as the global growth fueled by cheap fossil fuels sees an end


Abhishek Shah

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