We believe that capital inflow is becoming one of the main drivers of commodity prices and that these flows are not likely to abate in the foreseeable future.
For example, net inflows into PIMCo's Commodity Real Return Fund, which tracks an index of commodity prices, were $1.4bn in 2003 and $4.7bn in 2004. Inflows into this fund in January 2005 were $268m.
The commodity markets last saw large capital of inflows (and heightened investor interest) in the 1970s. In the three years from 1971, the