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Politics : Politics for Pros- moderated

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To: skinowski who wrote (282708)12/3/2008 1:50:04 AM
From: LindyBill  Read Replies (1) of 793608
 
I think you and Gold drill down more on commodity prices than most others here. I was kicking around what is going on with them today.

We all remember the famous bet about commodity prices declining in real dollars no matter what. The skewing of prices by the recent boom put that conclusion in jeopardy. The bust has now seen a general collapse of these prices.

We always talk about these products as being a "supply/demand" situation. But I wonder if the the bust right now has more to do with it than declining demand. When you look at demand, has it really gone down that much compared to the drop in prices? I don't know. Perhaps you and Gold do.

In other words, is a large part of this caused by speculation? The leverage in the commodity markets is very high.
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