Oil-thirsty China and India get most of the blame. The declining U.S. dollar, tight supplies, geopolitics and hurricanes also are on the villains list.
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..institutional investors... are pouring billions into index funds pegged to a broad basket of commodities
(this means energy, materials and farm commodities - that is food crops_JW), including crude oil, exacerbating the price gains.
Tuesday, financier George Soros told Congress that commodity index funds contributed to the oil "bubble" and caused "harmful economic consequences." His remarks echoed those of Michael Masters, a hedge fund manager, who testified on May 20 before a Senate panel. Masters said oil's rise directly correlates to the cash that pension funds and endowments are pouring into commodities futures markets. Assets allocated to all commodity index trading strategies by "index speculators," he said, have risen from $13 billion in 2003 to $260 billion through March.
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Five years ago, big investors were tiny players in commodities. But after the 2000 stock bust, they sought out the asset class to diversify. Greenwich Associates says that a third of investors in commodities have been active in these markets for less than three years.
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http://www.usatoday.com/money/industries/energy/2008-06-03-oil-prices-speculation_N.htm NOTE: "commodities" refers not just to oil but to farm crops too.