Many traders immediately think of precious metals like gold (GLD, quote)when hedging inflation.  

In the days of old when silver (SLV, quote) and gold (IAU,quote) were a currency widely accepted at your local merchant/banker this was true.

But in today’s world digitally speaking, better hedges are available in short bonds (TBT, quote), FOREX and in the raw commodities that are consumed, such as softs and grains ags (DBA, quote) and industrial metals like copper (JJC, quote).

Indeed in the late 60's through the 70's, agricultural and industrial commodities led the way. With the coming El Nino, and carbon tax trade, there is no doubt that constraints on these valuable commodities will produce shortages and perceived shortages.

In central bank parlance, its expectations that must be managed and they want people to think inflation, not to hot and certainly not cold. They will get it in spades if history repeats itself and governments and people act accordingly.

Traders need to develop the feel. If you are looking for assistance drop me a line at pa-uma@hotmail.com

John is a Senior Broker at Sierra Mesa Trading and has been working with clients in the field of financial products for over 25 years. John can be reached at LinkedIn