by Andrew Hoffman
Miles Franklin
This weekend, a reader emphatically tried to convince me oil prices were bottoming, as the “best cure for low prices is low prices.” His argument covered every possible angle, from fundamental to “technical”; assuming, generally speaking, that the historic supply glut – as exemplified by record U.S. gasoline stocks, much higher than a year ago – will soon be worked off, yielding materially higher prices.
On paper, that’s how commodity fundamentals typically work. However, the unprecedented “deformation” of commodity markets by decades of money printing, financial engineering, predatory lending, and unfounded Keynesian belief have made today’s commodity markets – and for all intents and purposes, all economic relationships – unlike any in history.