Tuesday, July 1, 2008
Speculators and Price
Robert Samuelson does his characteristic superb job of of puncturing the politically popular yet economically unsubstantiated charge that recent food and oil price rises are due to the emergence of a new brand of speculator in the market. I am willing to concede some portion of the price rise is due to investor activity, but ignoring the hypercharged world economy and continuing growth in China, India, and elsewhere shows a fundamental misunderstanding of supply and demand. Both Senator McCain and Senator Obama are guilty of demagoguing this issue.
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2 comments:
In my 75 years I have never seen the price of any commodity rise as much and as fast as petroleum has. Yes there is more demand but not to this extent this fast. The trading of commodities is not nearly regulated to extent that equities are. I believe that wheeler dealers are wheeling and dealing.
Get off the Gold standard and get on the Commodity standard. Turn the price of a bushel of corn to equal a barrel of oil. The challenge for those who have oil is they don't have enough food. Commodity Economics!
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