Billionaire George Soros said the boom in commodities is still in a "growth phase” after prices for oil, wheat and gold rose to records.
"You have a generalized commodity bubble due to commodities having become an asset class that institutions use to an increasing extent,” Soros said today at an event sponsored by the Centre for European Policy Studies in Brussels. "On top of that you have specific factors that create the relative shortage of oil and, now, also food.”
Commodities are in their seventh year of gains, with oil rising to a record $115.54 a barrel today as the dollar plunged to an all-time low against the euro. Rice has more than doubled in a year, while corn has advanced 68 percent and wheat 92 percent. Investments in commodities rose by more than a fifth in the first quarter to $400 billion, Citigroup Inc. said April 7 . . .
Soros’s comments echo those of Jim Rogers, a fellow founder of the Quantum Hedge Fund in the 1970s. Rogers is best known for being a commodities bull since the late 1990s, before the market started to rally in 2001. His Rogers International Commodity Index has more than quadrupled since its start in 1998.
Note: I do not know what Bloomberg did differently, but the audio now works on the iMac.
Soros Says Commodity `Bubble’ Still in `Growth Phase’
Saijel Kishan and John Rega
Bloomberg April 17 2008
Former U.S. Treasury Secretary Paul O’Neill discusses the U.S. economy and global financial markets, the performance of the U.S. dollar versus other currencies, and the Federal Reserve’s response to the mortgage and credit crisis.
Former Treasury Secretary Paul O’Neill"
The "strong dollar” policy that he and every other Treasury chief since 1995 endorsed is "a vacuous notion.”
"It implies in it that somehow we have the ability to manage the relationship between the value of the U.S. dollar and other currencies around the world,” O’Neill, now a special adviser to Blackstone Group LP, today said in an interview with Bloomberg Television.
O’Neill roiled currency markets when he was in office from 2001 to 2002, at one point with comments in an interview with a German newspaper that the U.S. pursued a policy of a strong economy, rather than currency. The current Treasury Secretary, Henry Paulson, has repeatedly stated that he is a "very strong” supporter of the "strong dollar” policy.
"When I was Secretary of the Treasury I was not supposed to say anything but ‘strong dollar, strong dollar,”’ O’Neill said today. "I argued then and would argue now that the idea of a strong dollar policy is a vacuous notion.”
The U.S. currency today fell to a record low against the euro, and has declined 15 percent against its European counterpart in the past year.
O’Neill Says U.S. `Strong Dollar’ Policy Is `Vacuous Notion’
Rhonda Schaffler and John Brinsley
Bloomberg, April 16 2008
O’Neill Says Strong Dollar Policy Is `Vacuous Notion’
Bloomberg, April 16 2008
An article on humongous hedge fund paydays in today’s NYTimes was quite interesting: “The richest hedge fund managers keep getting richer — fast. To make it into the top 25 of Alpha’s list, the industry standard for hedge fund pay, a manager needed to earn at least $360 million last year, more than 18 times…Read More