During years when the February cattle futures contract is trading at a discount to the April contract in the early fall, the February contract gains on the April as we move from the end of one year into the beginning of the next.

Although natural gas prices recently hit a seven-year low on the spot market, the action in longer-dated futures and gas-related stocks suggests that a marked improvement is around the corner.

The end of easy oil remains arguably the most powerful driver in the sector, though the unprecedented drop-off in demand that occurred in the wake of the credit crisis and resultant economic dislocation has obscured this long-term trend. But with the global economy and credit markets now on the mend, this theme should come back with a vengeance over the next few quarters.

Do surging gold prices indicate inflation is making a comeback? We probably won’t be able to answer that one for a while. But one thing the yellow metal’s strength does indicate is the debasement of the US dollar after a year of unprecedented “quantitative easing” to head off depression, as well as the fact that the US is no longer the world’s only major market for raw materials.

It’s not easy to buy a market at a new high price, and this is where the fear comes in. The timid trader won’t even consider such a play. And this is exactly what I advocate as the next big trade.

The depressed crude oil prices at the end of 2008 and early 2009 were the real aberration--not the current quote. Those depressed prices reflected unusually weak near-term fundamentals and historic imbalances in the futures curve. Much of the subsequent rally has simply been an unwinding of those imbalances.

Far too many investors ignore the role that improving credit markets have played in the recent rallies in stock and commodities markets.

The Canadian dollar's recent performance is an indication of two critical economic developments. Its rise coincides with increases in investor confidence and risk appetite. Also, however, and somewhat paradoxically, it's being used as a hedge against inflation in the US--in other words, a type of safe haven.

The global economy has been deflating, and when this process is complete the opposite will take place. With the unprecedented expansion of the money supply, there will inevitably come a time when the velocity of money will come back and cause greatly accelerated inflation.

Consumer and producer behavior from 2004 through mid-2008 is not consistent with artificially high oil prices. The speculation argument has little basis in reality. The real cause of rising prices is unusually strong demand growth coupled with sluggish supply response despite record spending.