Today's blog entry was going to be about soft commodities - that's the ones you can chew. Unfortunately, it will have to be about drunk driving, instead. But don't you worry, it's nothing really horrific, every human will live through the end of the story and, of course, I wasn't the one driving drunk.
Let me start this short note with a little theorem that I offer without a proof. For the most part and under steady state economic conditions: 1)Short-term commodity prices (within a span of a several months) are driven by expectations of supply and demand for that commodity. 2) Mid-term commodity prices are driven by the actual supply and demand for that commodity and to some extent inflationary expectations. 3) Long-term commodity prices (several years or more) are for the most part a function of inflation.