Rhetoric Over Reality

Remember how the price of oil (and gasoline) dropped like a rock in the months leading up to the 2006 elections? Did you ever ask why or how that happened? Have you noticed a similar trend beginning to occur right now going into the 2008 elections? Is it just coincidence? Is it the free market? Or is it something else? Where do you think the price of oil (and gasoline) will head immediately following the election? Or for that matter, where do you think the price of gold, silver and other commodities will head immediately following the election?

To answer those questions, you have to ask yourself: have the fundamentals in the world economy really changed? Has China, India, Brazil and the rest of the world suddenly gone on a commodity diet? Has the stealth battle to buy up in the ground commodity reserves (gold, silver and base metals) throughout the world suddenly stopped? Is the banking crisis suddenly all better? I think not. And I especially think that headlines proclaiming the commodities bull market has run out of energy are nothing more than rhetoric over reality.

It may look like we are entering a deflationary period. We are not. It's a temporary illusion. Prices are about to make a sudden and dramatic turn to the upside. Things will look much different come the first of the year.