Plenty of folks have argued that there’s a connection between commodity prices and quantitative easing.
Conventional wisdom says QE is driving commodities prices higher because all that money is flooding the system, raising inflation and inflation expectations globally.
But that doesn’t explain why commodities prices surged from 2005-2008, while the Fed’s balance sheet was flat, and was actually tilted more towards tightening.
Commodity movements are about demand and growth. At the margins, some extra liquidity could find their way into commodity speculation but to draw a straight line between QE and the CRB is hokum.
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