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To: Alberta's Child
"It wasn't just speculation -- it was a steep decline in the value of the U.S. dollar."

The two are linked but it's much more than a linear relationship. Not only is there the direct inflationary effect of a weak dollar, but also that speculators buy commodities as a hedge against inflation. This causes a multiplication effect which shoots the price up to the levels we've seen.

26 posted on 10/10/2008 3:25:51 PM PDT by Batrachian
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To: Batrachian

Well that Bush......him and his cronies can manipulate anything....!!


27 posted on 10/10/2008 3:26:36 PM PDT by Osage Orange (" I did not have radical relations with that man, William Ayers. " -Barack Hussein Obama)
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To: Batrachian
Hmm . . . good point.

Is a commodity like oil a good hedge against inflation, considering that these contracts typically have a short delivery date?

It's one thing to buy gold that can be stored for long periods of time, but oil is extracted, refined, delivered and consumed over a pretty narrow window of time, no?

40 posted on 10/10/2008 8:14:14 PM PDT by Alberta's Child (I'm out on the outskirts of nowhere . . . with ghosts on my trail, chasing me there.)
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