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cargocultist
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This is an interesting article, but isn't there something missing? What were the money supply changes during this period? For example, without knowing what the money supply - and in particular what the total of bank deposits was as a component of that - was doing, it's impossible to say whether the rise in commodity prices was due to increases in the money supply, or to increased demand for commodities. The Great Depression period in particular was marked by extreme fluctuations in the bank deposit component of the money supply, due both to debt default and bank failure, and debt repayment. Similarly today - the evidence around the world supports an out of control banking system with rapid expansion of of money as represented in bank deposits as the cause for the apparent rise in commodity prices, rather than supply/demand issues. India's money supply(M3) appears to have expanded by 15% over the last year, China's M2 measure by 15.7%.
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Jun 1, 2011