America’s crappy housing market, weak dollar, and troubled finance sector have forced institutional investors to look elsewhere for places from which they can draw their rapacious profits. What’s hot for spring? Commodities like food and fuel. And that’s a big reason for rising prices of those two vital categories: Speculators are dumping their money into the markets and creating a bizarre feedback loop in which speculator demand increases as prices rise. Or so says Michael W. Masters a hedge fund manager who testified before the Senate Homeland Security and Government Affairs Committee yesterday.
Of course, not everyone believes this to be true: