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Originally Posted by Paq
just something to watch: corn futures have hit limit up fairly repeatedly recently. IE, thye traded too high too quickly and were locked from trading for periods of time..
corn is now a huge part of our Energy AND our food...
just something else to throw in
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When you throw in the energy needed to raise maize in the American style, i doubt the net gain amounts to very much, if anything. So, no, it's not really that big a part of our energy resources.
Ethanol from maize is yet another Bush disaster.
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Originally Posted by Baraka_Guru
You make it sound like speculation is the only problem.
As I hinted at in a previous post, as the price of oil rises, exports begin to falter as oil-producing countries hang onto more of it for local use while their economies expand on oil profits. This invariably causes a further rise of oil prices.
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An oil bubble isn't like a housing bubble or other bubbles. It's a different story here.
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The common factor in all bubbles is a wave of valuation sweeping through a particular sector of the economy, be it tulips, land, or stock. When the wave passes through tulips, that value usually goes on to the next thing. (But not necessarily; the possibility of a net loss in value is always there. See, for example, 1929) Money is not going into stock markets. It is not going into land. It is going into oil and other raw materials.
How quickly does consumption in oil-producing countries increase?
It is very difficult to explain the spike in oil prices with an increase in consumption. You would be more correct to say that current prices reflect what the average mind thinks the average mind thinks the ration of future consumption to production will be.
Value is a phantom. It is not real.