gabe borenstein

Oil and Commodities Pricing: Fundamentals, Bubble or Manipulation?

There is no doubt that the price of crude and other commodities have been distorted by the unprecedented leveraged speculation(hedge fuinds?).There is absolutely no way to justify the prices of crude at four times the average of the past 10 years(about 28-30 dollar) based on the final deman.In fact the economic deceleration in the U.S ,in Europe and emerging market economies will implode the demand for crude.In fact the new justification for the high prices is the inability of most refineries to "crack" heavy crude which is abundantly available .On the other hand the technology available from certain companies(at least one of them Canadian) are being ignored.Surely ,the final demand is not what is driving the crude prices.In fact updated info ,did negate the CFTC's original conclusion.
The precious metals are as well the bastion of the speculative activity which contributes to buy commodities psychology driven by the high inflation perception.
Europe is only months away from recession and the Emerging Market Economies will follow .The commodity prices will implode to the long term average prices.In fact Detroit's auto issue should have a negative impact on the industrial metals.
One thing for sure ,cyclically the home prices have kept up with the rate of inflation. The home prices have been declining ....so much for inflation .I would be concerned if there was an evidence of the final demand driving the prices up.