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The Economist disagrees with the conclusion that higher prices are due to speculation: "Studies have shown that commodities that are not traded on exchanges hav
by friism 16y ago
The Economist disagrees with the conclusion that higher prices are due to speculation: "Studies have shown that commodities that are not traded on exchanges have tended to rise as fast, and be as volatile, as those that are." http://www.economist.com/node/17913011?story_id=17913011 http://www.economist.com/node/17913011?story_id=17913011
- light3 16y agoThere is definitely a correlation, at least recently, between availability of credit and the increase in commodity prices. One way to explain this is to look at house prices, and how real-estate agents 'value' these. They will value a property based on the past value of this property, the general increase in price levels since the last sell, and the price of recently sold properties in the area. Properties are not homogeneous, however the 'value' of all properties in a given area will be affected by the price changes of those being bought/sold.
- deleted 16y ago[deleted]
- jsmcgd 16y agoThe problem has nothing to do with whether these commodities are traded on exchanges, it's whether an individual or organization is allowed to buy so much of one commodity that it dominates the market and can permanently drive the price up when normal market forces would otherwise gradually and continually bring the price down.