Influences outside agriculture make matters worse: a weaker dollar makes restocking cheaper in local currencies; and dearer oil pushes up the cost of inputs (it takes vast amounts of energy to make nitrogen fertiliser, so fertiliser prices track oil prices).Some people mistakenly blame yet another factor: speculation.
The CME Group said that fundamental supply-and-demand factors, not speculation, were responsible for the increased price volatility.
Silver futures prices rose sharply yesterday on the Commodity Exchange in New York, extending a recovery from 15-year lows, in a rally fueled by technical factors and speculation that interest rates might fall soon.
The debate over what's behind the surge boils down to supply/demand dynamics on one side, and other factors like speculation and a weakening dollar on the other.
The "imported" inflation arises from several factors, commodity speculation funded by leverage (debt), US QE that has depreciates the dollar (to reduce the value of US debt), which also happens to be the global reserve currency (also used for trading oil), plus the UK's QE that depreciates the pound thus increasing the cost of our imports.
The effects of ldji and ltoi, the proxies of the economic factor group and speculation factor group, account for 49.2% and 25.5%, respectively.
pic.twitter.com/SAcTKn1J1G March 11 , 2014Another factor is speculation that China could see more domestic bond defaults -- following the first one ever, Shanghai Chaori Solar Energy Science and Technology -- last week.
Steered by its rear wheel, directional control wasn't as straightforward as cars steered by their front wheels, and the difference factored into speculation about the crash.
That morning, she heard that One Direction was booked to perform on "The X Factor," and speculation about their arrival gained traction when the band was photographed entering Heathrow Airport at 2 p.m.
The news yesterday that Silvio Berlusconi's final appeal against a jail term and ban from public office will be heard on 30 July may also be a factor, with speculation that the veteran politician could pull support for Italy's coalition government if the hearing goes against him.
