Rising oil prices? Wheat and corn? Copper? Rare-earth metals? Get used to it… this isn’t speculation
Economist Paul Krugman writes in the New York Times about our Finite World and points out that the rise in commodity prices that will continue into 2011 isn’t as much about speculation, as it was in 2008, or about excessive money creation driving runaway inflation. It’s about one simple thing: we’re running out of stuff, and we need more stuff. Think about it, the world — North America and Europe, in particular — is still struggling to climb out of recessionary doldrums but oil is about to crack $100 a barrel? One might understand triple-digit oil prices if the global economy were on fire, but it’s not on fire — it’s struggling to stay lit. What will happen when it is on fire? Scary, the thought. Krugman’s column is, as usual, worth the read.