"Who's to Blame?"

From the 'Financial Post':

"There have been commodity price spikes because of supply shortages in the past, such as the oil crisis of the 1970s, but there is no such shortage today, he said.

Over the past few years, institutional investors have moved into commodities as a way to protect themselves against volatility in interest rates and the stock market. Typically, he said, they spread their exposure across a swath of commodities, from energy and grains to metals. The first problem with this strategy is that the funds have been diverting so much capital that the market has ballooned.

"Commodities prices have increased more in aggregate over the last five years than at any other time in U. S. history," he said. Mr. Masters says institutional investment in commodities indexes rose to US$260-billion at the end of March, from just $13-billion at the end of 2003."



Well, that's settled then!