Wednesday, May 07, 2008

Spreading Memes

The aforesaid memes regarding the commodity bubble are spreading fast. And a certain large investment bank has published another "peak oil" report that puts the price of oil between $150 and $200. Interesting timing, and one wonders what the prop traders at that institution are doing (i.e., selling into strength and booking profits prior to a crash).

In any case, more of these "backlashes" to ANY mechanism that distorts actual market supply and demand (save the sacred cow of crop subsidies in the U.S. and the EU) will follow.

The Biofuels Backlash
May 7, 2008
St. Jude is the patron saint of lost causes, and for 30 years we
invoked his name as we opposed ethanol subsidies. So imagine our
great, pleasant surprise to see that the world is suddenly awakening
to the folly of subsidized biofuels.

All it took was a mere global "food crisis." Last week chief economist
Joseph Glauber of the USDA, which has been among Big Ethanol's best
friends in Washington, blamed biofuels for increasing prices on corn
and soybeans. Mr. Glauber also predicted that corn prices will
continue their historic rise because of demand from "expanding use for

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