The State of Commodities Boom, Bubble or Bust? Julia E. Bussie, CMT Money Mentor Solana Beach, CA October 9, 2004

Commodity Research Bureau – CRB Index Is It Over?

Headlines “Looking for the Next Bubble” – Feb, 2004 “The Great Commodities Bull” – Feb, 2004 “It’s a Bubble” – April, 2004 “You Too Can Tap Gushing Commodities Prices” – June, 2004 “Explosion Ahead for Commodity Prices” – July, 2004 “A New Secular Bull Market” – Sept, 2004

Bull Markets Topping in 2004 March Soybean Oil Copper April Corn CRB Gold Platinum Soybeans Soybean Meal Silver Wheat May Gasoline Lumber Hogs Pork Bellies June Feeder Cattle

Bear Market Rally Highs 2004 March Oats April Palladium May Dollar Natural Gas June Live Cattle August Cocoa

Odd Men Out Orange Juice Cotton Sugar Still Bullish Crude Oil and Heating Oil

Non-specific Fundamental Factors Fear U.S. Dollar Globalization

Globalization Factor - China Population Land mass Arable land Fresh water Oil

Population -Over-riding factor

Chinese Demand Cement Steel Iron Ore Coal Aluminum Oil Copper Platinum Grains Soybeans Cotton Meat

Supply has a way of compensating for demand.

Improved efficiency Scientific advances Innovations in production methods New mineral exploration Recycling Response to Higher Prices

Gold Annual Production

Source: IMF Staff Papers, 2002 Paul Cashin, C. John McDermott

The Big Picture

Questions?