"I would rather back human ingenuity," says Dylan Grice, a London-based global strategist for Société Generale and a self-proclaimed skeptic about investing in commodities. "If there's no copper, we will find something else."
Natural gas as an energy source is now roughly the equivalent of $24-per-barrel oil, says Philip Verleger, an energy economist and publisher of Petroleum Economics Monthly. Ethanol, mostly made from corn or sugar cane, is also on the rise."We expect the oil industry's monopoly on transportation to be broken," Mr. Verleger wrote in July. In an interview, he adds, "There will be oil. I'm just not sure there will be anybody to consume it." He thinks that projections of crude-oil demand in 2025 are typically 20% to 30% too high, and that crude-oil prices are likely to drop sharply as those forecasts go awry.
Spot prices for raw materials have been basically flat, after adjusting for inflation, since 1871, vastly underperforming stocks and bonds, [Mr. Grice] wrote in a December research note titled, "Commodities for the long run? Not on your Nellie—I'd rather eat coal!"
For more, see The Case Against Commodities by , October 5, 2011 at WSJ.com.
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