With a look toward inevitable inflationary pressures, banks have been adding to their commodities staffs as they look to make some good money in the sector as faith in the U.S. dollar continues to plummet.
It is expected to be a banner and breakout year for commodities this year, as investors have more appetite for risk and economic uncertainty make commodity investing look good.
The reason why there is more appetite for risk in the midst of economic uncertainty is the growing demand for commodities, which will continue no matter what the economic circumstances are.
Real economic recovery seems to be happening in China, and so there is no doubt the middle class demand for goods will drive up the price of commodities, not only next year, but for several years ahead.
This is why large banks are ramping up their commodities units in order to perpare for this inevitable trend to continue, as the commodity bull market has been on hold in general during the economic crisis.
Another factor has been the derivative industry, which won't function like it has in the past, and won't be destructive to banks, but won't make them any money (for the most part) either. Bank commodity investment will continue to grow, along with their staffs, as a result.
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