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Jim Jubak: Capitalism is both a destroyer and creator

Money Talks is a daily business column from CBC radio.
By Jim Jubak, senior markets editor for MSN Money.

Six months ago the question was "When will this financial and economic crisis be over?"

Today, increasingly, the question is "Why should this ever be over? What's ever going to turn this around?"

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Jim Jubak: Where are oil speculators when we need them?

By Jim Jubak, senior markets editor for MSN Money.

You can't trust oil prices. That was true when oil was running up to its high near $150 US a barrel in July. And it's true now when oil threatens to bust through support at $40 a barrel.

The problem at the high was excessive speculative trading. The problem now is exactly the reverse - too little speculative trading.

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Jim Jubak: The developing world struggles with food inflation

Money Talks is a collection of daily columns from The Business Network, which airs weekday mornings on CBC Radio One at 5:45 a.m. ET (6:15 a.m. ET in N.L.).

Argentina, Russia, the Ukraine, India, Viet Nam. That's just a partial list of countries that have limited exports of wheat, rice, and other grains.

The goal is to stop runaway food inflation, but limiting exports will, in fact, drive global food prices even higher. Speculators are the big winners since the less grain there is on world markets, the more hoarding and panic buying will drive prices higher and higher.

Over the last year grain prices have climbed at a stunning rate. On Apr. 3, 2008, corn for May delivery closed at $6 a bushel; a year ago it closed at $3.46. That's a jump of 73 per cent in a year. In the same period, the price of a contract for soybeans increased by 65 per cent and wheat climbed 123 per cent.

Food inflation is literally life and death for hundreds of millions in the world's developing countries.

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Jim Jubak: Will commodity prices keep on rising?

Money Talks is a collection of daily columns from The Business Network, which airs weekday mornings on CBC Radio One at 5:45 a.m. ET (6:15 a.m. ET in N.L.).

Oil at $110 US a barrel. Gold at $1000 US an ounce. Copper at $3.85 US a pound. How much higher can commodity prices go?

How much higher can the tide of fear go in the financial markets?

You've probably heard talk lately that commodity prices for oil, gold, copper, wheat, platinum, you name it, have entered their own bubble.

The argument goes like this: Commodity prices started going up because of fundamentals--there is a global supply crunch--and because investors were looking for a way to protect themselves against rising inflation.

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Jim Jubak: If it's such a bear market, why are commodities so bullish?

Money Talks is a collection of daily columns from The Business Network, which airs weekday mornings on CBC Radio One at 5:45 a.m. ET (6:15 a.m. ET in N.L.).

If the U.S. economy, the Canadian economy, and the economies of the European Union, China, and India are all slowing, why are commodity prices - and commodity stocks - rallying?

On February 15, crude oil futures hit a new four-week high at more than $96 US a barrel. Copper has rallied back to over $3.50 a pound. And in Minneapolis hard red spring wheat recently hit a record $18.53 a bushel.

What's going on? Aren't commodity prices supposed to fall when economic growth starts to slow?

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Jim Jubak: Who's to blame for the current market fiasco?

Money Talks is a collection of daily columns from The Business Network, which airs weekday mornings on CBC Radio One at 5:45 a.m. ET (6:15 a.m. ET in N.L.).

The Canadian dollar is in retreat. Blame it on the yen.

The Japanese economy is staggering toward recession. Blame it on the yen.

Global stock markets are reeling. Blame it on the yen.

Or, more precisely, blame it on the traders who borrowed cheap yen and bought stocks and currencies from Toronto to Hong Kong to Sydney. And who are now selling those stocks and currencies in order to replay their yen loans.

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