Commodities to rumble and tumble in 2011

I expect this year will include wild swings and volatility in commodity, credit and currency markets. Investors, savers and speculators are piling into commodities as a hedge to Bernanke's madness. Take a look at the bizarre behavior of sugar in the past week.




Massive intraday swings larger than 10 percent as governments intervene and investors become seduced by greed but terrified by fear. The best summary is this as to why the roller coaster will continue. As the government continues to print more digital money and the deficit and debt become ever larger, investors will run out of dollars and into things they can actually touch and hold. Real things. However, there will also be periods where they realize that they have purchased sugar, corn, wheat, or soybean futures at the highest level in history and will sell off after making some gains. Take note that commodities have recovered after every single take down which portends a healthy bull market.

It is not set in stone that the dollar will get wiped out or even become severely devalued. There is still a possibility that the ship gets turned around away from the rocks and towards the harbor. Unfortunately our leaders keep sailing towards that hyperinflationary outcome "full speed ahead". Their hubris is astounding. Congress recently passed the extension of the bush tax cuts and payroll tax cut extension for the next two years which will cost close to $900 billion. Thats $450 in more debt each year. So much for the deficit projections made by the Congressional Budget Office as the third (and likely not the last revision) will have to be made going forward. I'm a firm believer in FREE markets unimpeded by government and I think lower taxes is always better as people know best how to spend their own money. However, at a time when our store of value and medium of exchange (dollar) is at risk I think its safe to say that these types of policies are fiscal suicide.

For those that are fortunate enough to have some cash on the side, it never hurts to hedge out of the "official" currency of the day. Although fiat digital dollars will be exchanged for goods and services it is possible that some day soon the value of those dollars may drop suddenly and violently. Currencies have collapsed over and over again all around the world and throughout history. Why let the thieves at the top rob you by stealing your purchasing power? Hedge by buying some silver coin. Here is a photo of a silver eagle coin.



Would you rather trust fiat digital currency or this? Im going with my silver bitchezz.