Meddle in commodity markets at your peril

June 4, 2008

       Politicians clamouring for action to bring down high
commodity prices should be careful what they wish for.

    “The running gag is the price of bread in Moscow,” said
Hans-Bernd Menzel, chief executive of German power exchange EEX,
referring to state price controls.

    “The price of bread was very low, but there was no bread in
Moscow.”

    Now Russia has a more market-oriented regime every commodity
is available at the going rate.

    “I don’t know of one single case where political influence
on prices has improved the situation of the people,” Menzel
said.

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