Speculation and Commodity Price Inflation

link here to article

This article in Foreign Policy describes the role that speculation in commodity future markets has on prices. fundamental factors play a substantial role in price inflation but speculators in future markets are driving up the prices of futures, and that impacts current prices. The article also reminds us of the limitations of the nation state in our global economy. The US government, for example, could not stop the banks providing and selling the indexes that are used by speculators. They could locate the business elsewhere in the world with ease.