Free Republic

China consumes more than double what its natural resources can supply... China uses 15 percent of the world's total biological capacity—resources such as water, land and timber... "In the next 10 to 20 years, China's consumption will likely continue to pose threats to China's own ecosystems and place increasing pressures on global biocapacity," Water and electricity are priced below their market value in China, causing it to be inefficiently used ...

The stock market endured its deepest nosedive in more than 15 months Friday as the aspects of the U.S. economy most visible to Americans in their everyday lives appeared to be careening out of control. Skyrocketing oil prices and a weak job market sent the Dow Jones Industrial Average plummeting 394.64 points, its biggest single-day drop since Feb. 27, 2007. The blue-chip indicator ended down 3.1%, at 12209.81, with all 30 of its blue-chip components posting losses. Intraday Futures8 and Currencies9A potent blend of dollar weakness, speculation, bullish analyst comments, and geopolitical worries sent crude prices soaring. Ole Slorer, a...

Hedge funds and big Wall Street banks are taking advantage of loopholes in federal trading limits to buy massive amounts of oil contracts, according to a growing number of lawmakers and prominent investors, who blame the practice for helping to push oil prices to record highs. The federal agency that oversees oil trading, the Commodity Futures Trading Commission, has exempted these firms from rules that limit speculative buying, a prerogative traditionally reserved for airlines and trucking companies that need to lock in future fuel costs. The CFTC has also waived regulations over the past decade on U.S. investors who trade...

More on the possible contribution of index fund investment to recent commodity price moves. We and many others have been discussing whether the surge in investment fund purchases of long positions in commodity futures contracts may have been a factor contributing to the spot prices of those commodities beyond what would be warranted by considerations of physical supply and demand. John Mauldin shares an interesting graphic from Deutsche Bank researchers, showing that the prices of a number of commodities in which no futures market exists have increased even more dramatically than those traded on major exchanges.

The U.S. commodity markets' chief regulator will unveil policy changes next week meant to address public and political concerns that market malfunctions may be contributing to rising food and energy prices, The New York Times reported on Saturday. Citing people who have been briefed about the agency's plans, the Times said that the new measures would be announced by the Commodity Futures Trading Commission, which oversees exchanges central to the establishment of prices for commodities ranging from corn to crude oil worldwide. Facing mounting political pressure and farm industry demands, the CFTC is expected to outline measures to address the...

After being buffeted by the dot-com, housing and credit bubbles -- not to mention the Chinese stock-market bubble -- there is a readiness by people on Wall Street and elsewhere to ascribe the term "bubble" to all sorts of things. But when it comes to commodities like crude oil and corn, that may be off the mark. ...But figuring out whether a commodity exceeds its fundamental value is difficult: Because there is no income stream, there is no equivalent to the price-to-earnings ratios that people use to value stocks. Prices, to be sure, are soaring -- crude oil fetched $132.19...

Investing in commodities has been a brilliant move in this decade -- so brilliant that the strategy has attracted untold numbers of large and small players, particularly in the last few years. What do you suppose all of their buying has done to the price of oil? Pushed it down? With crude surging above $130 a barrel this week for the first time, a long-simmering issue is threatening to boil over: the role these new investors, often derided as rank speculators, have had in stoking the prices of oil and other commodities. Their standard line has been, "It's not our...

The global financial system these days is beginning to look like a giant Whac-a-Mole game--when we think we've knocked down one speculative bubble, another one just like it pops up. The latest is the commodities bubble--everything from oil and natural gas to gold, copper, wheat and rice....Like the credit bubble, this speculative bubble in commodities has badly distorted the workings of key markets and sectors of the global economy....this bubble is creating vast new wealth for some, including brokers, traders and investment houses who have gorged on fees and trading profits. The difference this time, however, is that even before...

Oil retreated after speeding to new peaks for a third straight day on Thursday, topping $135 a barrel as investors fretted over long-term supply constraints and a big drop in U.S. crude stocks. The latest leg of the rally began on Wednesday when oil leapt by more than $4 after U.S. weekly data showed crude stocks had declined by 5.4 million. Analysts had expected an increase. "Yesterday's EIA numbers set off this latest blast higher, but we suspect that prices would have gone up almost in spite of the numbers," Edward Meir of MF Global said in a note. "The...

Somewhere beneath the valley floor lies one of the world?s biggest untapped copper deposits, worth up to £44 billion In a dusty, windswept valley 20 miles southwest of Kabul there stands a cluster of derelict buildings, littered with shrapnel, shell casings and unexploded ordnance. It is an unremarkable scene by Afghan standards – at first sight, just another sad monument to three decades of war. Yet this desolate, seemingly hopeless, place is the source of Afghanistan’s most recent chapter of violence – and possibly now of a brighter economic future. It was here, in the Aynak valley, that al-Qaeda...

Food Shortages Growing? An email from a reader in the Midwest causes me some concern: "Last night at the daughter's horse riding lesson the price of horse feed came between my wife & the stable owner/riding instructor. One of her friends in Kansas said that his winter wheat looked great, but there was no wheat in the wheat plant heads (kernel/seed-I don't know the correct term). He reported that the grain miller that they normally use said that they are having trouble getting any wheat to prepare. Same thing from many Kansas wheat growers; plants look great, but no wheat...

Vast amounts of money are flooding the world's commodities markets, driving up prices of staple foods like wheat and rice. Biofuels and droughts can't fully explain the recent food crisis -- hedge funds and small investors bear some responsibility for global hunger. Not long ago, Dwight Anderson welcomed reporters with open arms. He liked to entertain them with stories from the world of big money. Anderson is a New York hedge fund manager, and as recently as last October he would talk with enthusiasm about his visits to Malaysian palm-oil plantations and Brazilian grain farms. "You could clearly see how...

Texas Gov. Rick Perry asked the government to cut "skyrocketing" food prices by waiving half of the renewable fuel standard for ethanol made from grain. The Republican governor from the oil-producing state said in a statement that such a waiver was "the best, quickest way" to ease rising food costs before lasting damage was done. "We're diversifying our state's energy portfolio at a rapid rate, but this misguided mandate is significantly affecting Texans' family food bill," he added. Perry said that over the last three years, the price of corn has shot up 138 percent around the world, while global...

An escalating global food crisis could bring the problem of hunger home to the US and other developed countries. Millions of poor Americans risk going hungry if food prices continue to rise and food agencies struggle to cope with rising costs, dwindling resources and a huge increase in demand. Already more and more poor people in the US are turning to charity and government assistance as they struggle with rising food costs and soaring fuel bills. Even some stores are restricting bulk rice purchases as the grain reached a fresh high on Thursday. Laurie True, executive director of the California...

WASHINGTON (AP) - Federal regulators on Tuesday said placing tougher restrictions on agricultural commodity trading will not alleviate high and volatile prices in those markets, and could make matters worse. Farmers, ranchers and grain processors met with regulators in Washington to discuss the causes behind turbulent markets and historically high prices for wheat, corn and other foodstuffs. Farmers and food producers argue speculation by Wall Street investors -- not a supply-demand imbalance -- is what's driving up prices and volatility, making it harder for commercial buyers and sellers of grain to use the exchanges as a tool for limiting the...

“If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.” -Thomas Jefferson The Founding Fathers put Congress in control of the the U.S. monetary system. In 1913 Congress relinquished this awesome power and gave it to a private cartel with the passage of the Federal Reserve Act. For almost 100 years, Federal Reserve policy has swindled Americans...

China became the world's biggest producer of gold last year, overtaking South Africa which held top spot for 100 years, the independent precious metals consultancy GFMS said here on Wednesday. Meanwhile the price of gold was on course to reach a record high of 1,100 dollars an ounce in 2008 amid global financial turbulence, the respected research group added in its latest annual Gold Survey. Gold struck an all-time peak of 1,032.70 dollars an ounce on March 17, four days after the yellow metal breached 1,000 dollars for the first time. "Global mine production fell by a slight 0.4 percent...

First the good news: Automotive expert Ed Wallace says there's no gasoline or oil shortage in the U.S. today and near-record reserves are on hand. Now the bad news: Not only has the congressional mandate for ethanol jacked up the price of food, but Washington, Wall Street and fuel producers all want you to think the gas and oil shortage they keep talking about is real. Washington, Wallace says, appears to be protecting oil speculators and ethanol producers rather than the interests of U.S. citizens who will ultimately pay higher prices for food and U.S. farmers, who are already staggering...

NEW YORK (AP) - Commodities prices fell in a broad sell-off Monday as profit-taking on the last day of the quarter and a bearish U.S. agriculture report battered everything from precious metals to grains and energy futures. Relentless global demand for agricultural coupled with dwindling world stockpiles has exacerbated the supply crunch for wheat, soybeans and corn, which have spiked to historic levels in the past year. Hoping to capitalize on the boom, U.S. farmers are expected to plant about 75 million acres of soybeans and nearly 64 million acres of wheat in 2008, year-to-year increases of 18 percent and...

CHINA, AS EVERYONE KNOWS, IS A BIG FORCE IN THE extraordinary boom in commodities. Its voracious appetite for everything from corn and wheat to copper and oil has helped push up U.S. commodities prices by some 50% over the past 12 months. But China is by no means the whole story. Speculators -- including small investors -- are also playing a huge role. Thanks to the proliferation of mutual funds and exchange-traded funds tied to commodities indexes, speculative buying has gone way beyond anything the domestic commodities markets have ever seen. By one estimate, index funds right now account for...