Patrick Fresne

I don't like to appear to be splitting hairs, however I don't agree that policies to manipulate the supply of money have any substantive long term impact on commodity prices, as is suggested above. It stands to reason that policies such as Quantitative easing on the part of the US Federal Reserve can influence commodity prices in the short-to-medium term, for example, through a weaker US dollar. But as we have seen over the past decade, these policies invariably result in a race to the bottom, with other central banks eventually forced to adopt similar policies, with the end result being that everyone winds up back at square one. Commentators in the financial media often point to monetary and fiscal policies by central banks and governments as being the primary driver of long-term upswings in commodity prices, but I think the evidence for this proposition is patchy at best. At most, I think such policies are just one of the pieces in the puzzle.