Oil prices keep churning higher on the chaos in Libya – Brent Crude has jumped more than 2% to $108 a barrel – but food commodities are taking a different path.
After falling sharply yesterday, food commodities are down again today, with the exception of soy beans, which are up marginally. Corn, oats and rough rice are down 2% to 3%, wheat is down more than 1%.
The fall in food commodities is attributable in part to a shift in hot money. Rather than chase the food commodities higher, some of that money has moved decisively into the oil markets, which are bigger and more liquid....MOREBack on February 11 I posted "Why Are So Many People Laughing At Paul Krugman?" . Professor K. has been arguing that QE2 has nothing to do with the rise of food commodities, instead blaming global warming.
As one commenter (moi) said, "the copper and silver harvests have been impacted as well".
We'll be doing a good old-fashioned fisking of Krugman, on various topics, over the next month.