Currencies are inflating around the World. The dollar seems worse because it is. It's inflating faster than any other major currency. Financial institutions are failing. They are holding hundreds of billions in bad loans. The loans will never be paid back and even if they are, inflation will make the principle and interest equally worthless in the end. Investors with money to put out on the street can't get enough interest to beat inflation. Economies are shrinking, there are no growth stocks to invest in.
Still, people have to put their money to work. It isn't just the rich. There are huge sovereign wealth funds. There are state funded employee retirement funds that hold the fates of hundreds of millions of elderly pensioners, worldwide. The old people expect a check every month.
One of the few things that will feed those old folks on a reliable basis, right now is commodities. Food, fuel, metals, fibers any raw material for which there is always a steady demand. These commodities get bought up and held by speculators. Since most of it is being held, there is less on the market, so the market price goes up. When the price goes up, the speculators take profits, selling to other speculators. It doesn't matter how many times these commodities get bought and sold, they never get to actual consumers. When consumers feel a shortage of the desired commodity, they offer to pay more. Prices go up, speculators make more profit. They use their profits to buy and hold more of the commodity. And Bingo was his name-o.
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