How to Cash In on Commodity Inflation

NEW YORK (TheStreet) -- It would be wrong to argue that the protests in Egypt have been economically based. It would be equally wrong to argue that they've solely been political in nature either.

Commodity inflation has been an incendiary component to the outrage pouring out into the streets in Egypt as well as the cause for the Jordanian king to replace his government. New index funds, ETFs and ETNs, as well as managed futures products and discount commodity trading providers all give access to the fast-moving price motion of food and other commodities. These financial influences have been hypercharging the price motion of basic foodstuffs. Flooding in Australia, droughts in Russia and China, and reduced crops from India and South America are the fundamental supply challenges in Wheat, Corn, Cotton and Coffee and cannot be denied. It is also undeniable that the quick action of investors and traders looking to capitalize on the price motion from these fundamental events has inflated the moves from them : 75% in Wheat, 84% in Corn, 85% in Coffee and an incredible 151% in Cotton in the last year alone. Speculative forces have quite simply swamped the small and delicate commodity markets that have never been designed to accept this kind of investment and trading interest -- another $80 billion dollars of commodity index money has poured into funds, bringing the temporary total to a whopping $350 billion according to Barclays. Another estimated $25 billion in futures-based ETFs and ETNs have accumulated in the last two years, with more of these stock-like funds starting up seemingly every day. The numbers for personal futures accounts and managed futures funds are also increasing, although the numbers for these are a little more difficult to obtain and gauge. But the point of all of these inflows of money is clear: As I point out in my upcoming book "Oil's Endless Bid," out from John Wiley in April, the vast majority of this interest is LONG-ONLY -- most every one of these investors and traders are looking to buy, and only buy. 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