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April 18, 2008

The Credit Crisis Is Over!

The dollar is popping higher and commodities are dropping because Citi reported a loss that was marginally better than the worst estimate, while an analyst interpreted their report to imply the worst of the crisis is behind us. That must mean good times are almost back, the Fed will slow down the printing presses, and the commodity bubble is over, right?

I seriously doubt it. My guess is smart money is grabbing commodities with both hands right now. Despite taking a bit of a hit on my substantial silver position, I am adding to it today (it's down 70c at the moment). I bought some sugar, as well. These types of sell-offs are going to be common in this phase of the commodity bull. Weak hands get shaken out as we climb the wall of worry.

 

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