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Saturday, August 8, 2009
Bull market in Commodities: Goldman predicts repeat of 2008 commodities spike TNR.v, CZX.v, RMK.v, ASM.v, CGH.to, BTT.v, EPZ.v, HUI, XAU, GBN.v, SGC.v
Posted by andre at 9:45 AM
It is always important who is talking: these guys know that printing press will result in Inflation and rising Demand for Real Assets and Commodities, Bull is alive and will rise to the new highs with damaged Supply side by recent crisis. Years of underinvestment will bring fortunes to those who is bold enough to go into commodity Supply chains now early in the recovery cycle.
New markets will be developed by the new Bull:
"Once it was estimated that there is a place for six computers in the world. Electric cars is the base for the next industrial revolution and will drive alternative energy economy for years to come. China and India will leap frog directly into the Green future and West will have to catch up. Cash constrained, coming of work force Baby Boomers will opt for Electric cars, in our view, once they will be proven to be safe and at the same price level as conventional vehicle. People will be ready to invest in a low maintenance and cheap to run vehicles, which will cover their domestic needs. Electric Cars' economics with 3 cents per mile against very fuel efficient 13 cents per mile of oil driven car will be a selling force for the market place. Demand will be fueled by government rebates, lower taxes and lower other ownership fees like congestion charges in London, UK - which are abolished for EVs. Do not underestimate "Feel Good" marketing factor."
"Goldman predicts repeat of 2008 commodities spike
Thu Aug 6, 2009 9:04pm IST
* Goldman says commodity prices heading for "redux of 2008"
* Says demand needs to be rationed by higher prices
By David Sheppard
LONDON, Aug 6 (Reuters) - Goldman Sachs said it expects commodity prices to spike sharply higher next year, mimicking the moves in 2008 when oil almost hit $150 a barrel and other commodities touched a series of all-time highs.
The U.S. bank said potential supply shortages created by years of underinvestment have been exacerbated by the global financial crisis and tight credit conditions.
"As the commodity markets rebound with the broader global economy we expect a redux of 2008 when severe supply constraints forced the rationing of demand through sharply higher prices to keep the market balanced," Goldman Sachs analysts said in a research note dated Aug 5.
"As the developed world increasingly begins to consume like Westerners the demands placed on the finite resources of the planet increases. This trend of human populations growing faster than the earth's ability to produce not only impacts food production but that of commodity usage."
Goldman Sachs made headlines in early 2008 after analyst Arjun Murti predicted oil prices could spike as high as $200 a barrel. Oil prices had never before traded above $100 a barrel until January 2008.
By July of that year, oil had hit a high of $147.21 in New York, before it crashed to almost $30 a barrel by the turn of the year as the recession slashed demand.
Prices have since recovered to around $70 a barrel, but some economists have already cautioned this level could be high enough to derail any economic recovery.
Other analysts have also said the commodity price spikes could have permanently destroyed some demand, especially in the developed world, which could mean last year's rally is unlikely to be repeated near-term.
Equity analyst Murti worked on the latest Goldman research note alongside the bank's commodity research team, led by Jeffrey Currie in London."
Thu Aug 6, 2009 9:04pm IST
* Goldman says commodity prices heading for "redux of 2008"
* Says demand needs to be rationed by higher prices
By David Sheppard
LONDON, Aug 6 (Reuters) - Goldman Sachs said it expects commodity prices to spike sharply higher next year, mimicking the moves in 2008 when oil almost hit $150 a barrel and other commodities touched a series of all-time highs.
The U.S. bank said potential supply shortages created by years of underinvestment have been exacerbated by the global financial crisis and tight credit conditions.
"As the commodity markets rebound with the broader global economy we expect a redux of 2008 when severe supply constraints forced the rationing of demand through sharply higher prices to keep the market balanced," Goldman Sachs analysts said in a research note dated Aug 5.
"As the developed world increasingly begins to consume like Westerners the demands placed on the finite resources of the planet increases. This trend of human populations growing faster than the earth's ability to produce not only impacts food production but that of commodity usage."
Goldman Sachs made headlines in early 2008 after analyst Arjun Murti predicted oil prices could spike as high as $200 a barrel. Oil prices had never before traded above $100 a barrel until January 2008.
By July of that year, oil had hit a high of $147.21 in New York, before it crashed to almost $30 a barrel by the turn of the year as the recession slashed demand.
Prices have since recovered to around $70 a barrel, but some economists have already cautioned this level could be high enough to derail any economic recovery.
Other analysts have also said the commodity price spikes could have permanently destroyed some demand, especially in the developed world, which could mean last year's rally is unlikely to be repeated near-term.
Equity analyst Murti worked on the latest Goldman research note alongside the bank's commodity research team, led by Jeffrey Currie in London."
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