Quote Seeking Alpha / Barron’s

Commodity bull Jim Rogers notes that there are about 70,000 mutual funds in the world, and only about 50 that invest in commodities. He thinks the speculative bubble has a few years to go. But looking at the ‘smart money’ — farmers and others who actually trade in and use the physical commodities — tells a different story. Net commercial shorts are 30% higher than a previous record.

Factors that could burst the bubble:

• Even the slightest hint of a China slowdown (much of the bullish outlook is due to the perception of an ‘insatiable’ China).
• A U.S. recession.
• A stronger dollar (commodities are dollar-denominated).
• A stronger stock market, leading people to put money back into stocks. (Or, conversely, a weaker market that sees traders liquidating commodity longs to meet margin calls. Barron’s doesn’t mention this, but it got some mileage when gold and oil dived suddenly a couple weeks ago.)
• The CFTC changing its exemption of position limits on index funds.

Personally, my money’s on Jim Rogers, but we’ll see

Had coffee last week with a reporter from The Atlantic, James Fallows. Just saw an excellent story he put together called “Countdown to a Meltdown”:

America’s coming economic crisis. A look back from the election of 2016
Countdown to a Meltdown
January 20, 2016, Master Strategy Memo
Subject: The Coming Year—and Beyond

It’s an excellent read. Check it out.
There’s also a great article called “Win the peace” with a speech from Thomas PM Barnett at the TedTalks. Watch it.