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ProShares Ultra Basic Materials Message Board

  • dr_program dr_program Feb 27, 2009 1:31 PM Flag

    Inflation and Basic Materials

    If inflation is predicted to go much higher due to all this government spending, wouldn't it invrease the price of basic materials? And wouldn't demand for basic materials needed for infrastructure programs pushed by the government also increase the price of basic materials?

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    • Just compare UYM to other inflation sensitive holdings and you will not see a correlation. However, we are till in a deflationary environment and the firms that use basic materials will not buy more until those inventories are worked off. However, when they are UYM should do well as there will be to many dollars facing chasing to few goods as buisness work off inventory. The hyper inflation question has not been answered but I think it will as the dollar is a fiat currency. True the dollar is trading up but compared to what other worthless fiat currency. I think the mere fear of future inflation will set a floor for UYM and when you ee treasurey yields trade past historical averages you will see the inflation.

    • demand destruction is happening long before inflation will ever be a problem

    • Any inflation of significance is at least one year away.

      We've just witnessed an enormous bubble in all commodities fueled by historical reckless credit bubble.

      I think there is likely to be a rally in equity/commodity markets starting within 6 weeks and lasting up to 6mths but it will start from much lower prices , imo.

    • yes....thats what we are waiting for..the stimulus to start working....when it does we will move fast.....give us 30 days more are we will see the effect.

 
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