Role of Speculators
We saw this in 2008. Oil and food inflation (partly driven by the former, as well as ethanol) and spiking gas prices. Given that the public’s patience has been sapped (marked by protests all over the world) by gross mismanagement of the economy, this has the makings of a really messy summer.
The fall in food commodities is attributable in part to a shift in hot money. Rather than chase the food commodities higher, some of that money has moved decisively into the oil markets, which are bigger and more liquid.
-Shlok
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