I would say that the main reason prices of commodities are going up is that the FED is printing massive amounts of $ through QE1 and QE2.
If you think that this is a speculative bubble caused by traders then I suggest you just short the commodities and make some money bursting the bubble and bringing prices down again. Put your money where your mouth is.
It's almost becoming taboo to talk about the FED's activities, as though it's some kind of conspiracy but in my opinion this is a very valid point.
It's hard to call it a bubble when all asset classes are inflating.
Edit: Just to be clear i'm not arguing the premise of the article, just that such extreme speculation would not be possible without the enormous concessions made for these banks.
Many countries (for instance the US) currently have massive debt and budget deficits. They have three ways out of it:
1. Increasing taxes.
2. Lowering expenditure.
3. Printing money.
From a political point of view #3 is by far the easiest route. I therefore fear that many countries will "default through inflation". In other words, we will see massive inflation, possible even hyper-inflation. This will be a huge hit to the middle-class. Because people with job but no savings are affected the most by massive inflation.
"Printing money is the last refuge of failed economic empires and banana republics and the Fed doesn't want to admit this is their only idea." Don't worry, it's (partially) tongue-in-cheek.
"In other words, we will see massive inflation, possible even hyper-inflation." Do governments ever learn? This is what happened in the Weimar Republic and is happening today in Zimbabwe.
Where I live (Ireland), the government is trying to do option 1 and 2, without success so far. Austerity measures are hurting the economy short-term by dampening consumer confidence (fortunately, internal consumption isn't everything, as we are an extremely open economy and will pick up as exports grow.) They'd possibly be trying option 3, except the European Central Bank controls our currency and ECB rules state that a country can't run a deficit over 3% of GDP without incurring major penalties.
Austerity measures are painful but necessary. I think that ten years from now you will be better of than the Americans, simply because the austerity measures are stopping all the malinvestment and over-consumption as quickly as possible. I'm Swedish and we went through the same process twenty years ago when our real estate market crashed. Luckily we didn't do like Japan, which still hasn't recovered from their crash from the early 90's (they did what the FED is doing now).
Bankruptcy is never fun but it's the main thing that makes a market driven economy more efficient than a planned economy. You have to stop malinvestments and reallocate resources to something more efficient. This reallocation can be painful but is necessary in the long run. The recession is not the problem, the boom was the problem.
You borrow shares of the index today and sell them immediately. You will need to return those shares at some point, depending on your contract. The day the shares are due, you can buy them at the market price and complete the deal.
That's one way to do it. You can also use things like puts and mini-futures, which have some convenient properties. For instance when selling something short your equity can become negative. When buying puts, the worse-case scenario is zero.
If you think that this is a speculative bubble caused by traders then I suggest you just short the commodities and make some money bursting the bubble and bringing prices down again. Put your money where your mouth is.