Abandon hope all ye who enter here was the inscription written above the gates of Hell in Dante’s Divine Comedy.
Like Archbishop Thomas Cranmer before he was burned at the stake for heresy, the U.S. Commodity Futures Trading Commission (CFTC) seems about to make a dramatic recantation.
- Jorge Maia is head of Research and Information for Industrial Development Corporation of South Africa, established in 1940 to promote economic growth and industrial development. The opinions expressed are his own –
The commodity boom and bust in the last 5 years suggests there is a natural limit on how much investment money these markets can absorb before price-setting mechanisms become distorted and prices unmoored from supply and demand fundamentals.
By John Kemp
LONDON (Reuters) – By driving up long-term real interest rates, the forthcoming flood of U.S Treasury borrowing threatens to crowd out the amount of capital for investing in other asset classes, creating a much tougher environment for commodity prices over the next two to three years.
(John Kemp is a Reuters columnist. The opinions expressed are his own)
LONDON (Reuters) – As the economic outlook darkens, and speculative interest in commodities and other risk assets wanes, prices have fallen back from the upper part of the trading range set by fundamentals, and the market is now hunting for the floor set by supply-side cost structures and producer strategies.