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T E Cho


One thing that I'm not clear on is why there aren't losses equal to the gains, afterwards. Driving up the prices should result in eventual oversupply, and then a collapse of prices. The collapse should result in losses.

The only thing that could explain it is some artificial price support to keep it from going too low, below a certain point. Maybe crop price supports are keeping it from going too low, making it a low risk to bid up prices, but there are no oil price supports... Maybe oil is just riskier. Or maybe there is an exploitation on the non-linearity of demand. If youre starving a loaf of bread is worth $1000, but if youre not and theres an oversupply, it gets sold for animal feed at $.10 for two loaves making an avearge of $500 per loaf over time, a inflation result on average.

So the question becomes, what prevented this from happening as much in the past, changes in the laws somewhere?

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