Ed Wallace, dßlkah÷fundur hjß BusinessWeek, heldur ■vÝ fram a frambo og eftirspurn rÚttlŠti ekki sÝhŠkkandi olÝuver - Ý raun sÚu ■a braskarar og grŠgi sem valda ■vÝ a veri hŠkkar sÝfellt.
It's not a supply crisis that explains the sharp spike in oil prices. It's unregulated commodities markets and greed
Commodities have often been the refuge for investors who have lost money on equities or fixed-income investments. Moreover, the commodities rush today is not limited to oil; now we also have runaway food and feed prices. Could it be that all the financial losses on subprime mortgages, plus the anticipation that the option ARM mortgages about to reset could be an even bigger problem, combined with the huge losses in securities last year, are why investment money today is flooding into often unregulated commodities, where the demand pricing of the final goods is inelastic?
Consider this: You may not buy gasoline or even eat today, but by next Monday you'll probably have to do both, no matter what it costs. Basically, besides enabling the Fed to bail out Wall Street and our banks again, every time you gas up or eat you may be paying investors to cover other financial losses. We know that investors can't control their losses on mortgages, securities, or bad loans. But, demonstrably, if not restrained they can drive up the price of goods that we can't get out of buying. Odds are, that's what's really been going on.