Posted by
L Gravel on Tuesday, July 01, 2008 10:46:59 AM
Oxford Analytica in Forbes discusses reasons for the rise in commodity prices:
1. Supply and Demand
2. Weak Dollar
3. Questinable Policies
4. Speculators
5. Monetary Policy
Re: #1,
duh.
#5 affects #2. Because interest rates are low, foreign investors can earn a higher rate of return elswhere. Therefore there is less demand for the dollar.
Re: #3, as I always say, Ethanol is the answer... because the presidential primary begins in Iowa. As the article states, ethanol consumes a
quarter of the U.S. corn crop. Hello!
Re: #4, if in doubt, follow the lead of
Vladimir Ilych Lenin
and blame the speculators! What do you want to do, folks, shut down the futures market? You do realize, any time you agree to buy something at a certain price in the future, such as locking in a mortgage interest rate, you're a speculator.