The Dollar is weaker and I would expect this pattern to remain for many years. The economy is in a mess and I don’t see any long-term fixes anytime soon. Politicians will not do the right thing (either party), and the Fed is still trying to bail out our banking system. Thus, we are only in the middle of a long-term bull cycle in commodities and inflation is just getting started.

Soybean futures are still looking strong and crude oil is targeting $150. I still see precious metals as the best play over the long run in commodities as a steady performer with high upside potential. Cocoa futures finally had sharp break late in the week as the Dollar rebounded a bit.

The Dollar Index broke support Wednesday and ended the trading session much weaker. This, of course, helped spur another rally in commodities. Record highs were hit again in crude oil, soybeans and even copper futures.

Copper had been on the ropes the last couple of months, as it could not break through the $4.00 level. Well, today was the day. September copper futures screamed 13.60 cents higher to close at $4.0465. There will likely be consolidation on Thursday, unless some traders are caught short and have to cover their positions. Otherwise, it looks like a powerful breakout so far.

Crude oil futures closed at a record high of $143.90 a barrel as weekly supplies dropped 1.98 million barrels in the latest report from the Energy Department. Oil is making another leg higher and $150 should be the next target.

Inflation is becoming a serious problem and it is only getting worse. If we stay on this course, commodities have a lot of room to move much higher. Interest rates and the Dollar have to rise to slow this train. The U.S. economy is getting weaker and is much weaker than the government is reporting. Could you imagine how much higher commodities would be if the U.S. economy were growing at 4 percent right now?