Will Basic Materials keep rising? (PYZ, IYM)

The iShares Dow Jones US Basic Mater (NYSE:IYM) and the PowerShares Dynamic Basic Material (ETF) (Public, NYSE:PYZ) are both looking like decent plays right now.

From ibankcoin.com:

Back in 2007, there were food shortages and gas lines, all thanks to “global growth,” embodied with all of its joys and splendor— throwing the working man (you) into idle sewer pipes and cavernous manholes. Now, we have a different scenario.

Post unwind, central banks have flooded the system with “banana money,” as in “Banana Republic” style fiscal policy, not to be confused with the egregiously overpriced retailer. If you see the highs of 2007—just north of 450— on the chart featured above (CRB Index), consider the following:

• “Global growth” can regain 2007 levels, with no problem.
• Due to the crash of commodity prices, during most of ‘08, capacity is not nearly what it was in ‘07. In other words, mines were shut down and rigs were stacked. In order to get capacity utilization back to the 2007 highs, it will take some time. No one thought we’d recover this fast, including the mining/oil & gas giants.
• The creation of fiat currency is habitual (think drug addict); policy will not change. “They” do not care about “your” quality of life, only preserving “the game.”

Bottom line: Barring some sort of sincere intervention to buoy the dollar (rise in rates), the CRB index is not even close to the top. We can take out 450, no problem, sending your grocery and electricity bills through the roof, yet again. At this stage, the ball is already rolling towards that direction, major props to Jakegint for seeing it early. With my money, I will hedge out my egregious monthly tomato expenses with an oversized portion of basic material stocks, over the coming weeks, months and possibly years.

Source: http://ibankcoin.com/flyblog/2009/10/18/you-aint-seen-nothin-yet/