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Turning Paper into Bread

Posted on May 30, 2008

A recent testimony by Michael Masters before a Senate Committee stirred some controversy about the influence of speculators on commodity prices. Masters claims that institutional investors are contributing to food and energy price inflation, by generating significant additional demand in futures markets and therefore adding upside pressure on futures prices, which then spill over to spot prices. At 1.3 billion bushels, the current wheat futures stockpile of index speculators is enough to supply every American citizen with all the bread, pasta and baked goods they can eat for the next two y...

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inflation