I exchanged a few emails with Jim Rogers the other day, he knows what he is talking about in terms of govt policy and the potential for making things worse.
Here is the Rogers commodity index, it has taken a beating with the recent demand destruction and commodity bubble burst.
Yes, it has been a wild ride, but compared with other paper based assets, the index hasn't fallen that far. I am still perplexed why anybody chases the yield available on US treasuries. 30 Year strips did extremely well last year, but that was last years bet.
Liquidity and lack of other options isn't a responsible or reasonable answer. Think about how stupid that could sound if the yield on 10 year notes goes to just 6%? The pay:skill parity between astrologer and fund manager is seriously out of whack. You gentle reader can determine how the spread should narrow.
For the quants out there, the single day auto-correlation trade no longer works on the time series, but longer time horizons may be interesting :).
