Commodities

3

Boom and bust is back

With Brent and WTI crude both surging to post-GFC highs Friday, I’m beginning to suspect that the world has entered a new era of oil price and growth volatility that spells the end of the Great Moderation. Why so? Supply and demand are the key to all things economic.  Previously at this site, the Unconventional

4

Rio has a whinge

Some days rent-seeking is a challenging business. Take Tom Albanese, CEO of Rio Tinto, who today held forth on the evils of government intervention in mining. According to Reuters: Besides, technical constraints, we are also seeing human constraints. We are seeing a combination of resource nationalism in some cases,” he said, citing “difficult governance” in

4

Gotti is wrong on oil

But should be congratulated for staking out a position, a rare event in today’s world of commentary flip flopping. As Deus Forex Machina likes to say, disagreement makes a market so let’s rip in. Gotti asks: Why should oil prices rise in response to the latest turn of events in Libya? We are already seeing

34

House prices, gold, and long-term investing

One thing I’ve always believed about investing (as opposed to speculating) is that it’s important to step back and take a look at the long-term picture. In the shorter term, markets are subject to periodic “manias, panics and crashes”, as Charles Kindleberger put it in his classic study of financial crises. But in the long-term,

5

Gold, Silver and Oil Ratio

As part of my “Crashlist” I regularly follow the spot price (in USD) for gold, silver and oil as they are the three benchmarks that measure the strength of the global economy, the value of the US dollar and the speculative excess inherent in modern global markets. Bullion Baron has some great insight into these

2

Kloppers, Marius Kloppers…

As this blogger keeps saying, not all markets are created equal. In strategic commodity markets, where governments are big players, the dynamics are not as simple as the balance of supply and demand determining equilibrium. In strategic commodities, when prices go up, demand does not fall. Rather, it increases as governments panic about security of

8

Paul Krugman is wrong (updated)

A few days ago, Nobel Laureate Paul Krugman declared again that there is no ‘financialisation’ element to the current commodity price surge. He began: I’ve been getting a fair bit of correspondence insisting that political unrest, in the Arab world and elsewhere, is being caused by … Ben Bernanke. You see, quantitative easing is responsible for