RE: [Pen-l] finance question

["Perelman, Michael" <MPerelman@xxxxxxxxxxxx>]

I agree with Randy's point, but we were told by the experts that such
speculation could not juice oil prices.

Jim D. wrote:

>>Randy Wray presented a talk on the current financial crisis. As usual,
his talk was extremely interesting and useful. Crucially, he pointed
to a simple explanation for the roller-coaster behavior of the markets
for commodities (oil, etc.) in recent years. Organizations such as
pension funds were allowed by deregulation not only to invest their
funds in commodities, but in commodity futures. Like fools, they
rushed in, buying oil futures and the like. This drove prices very
high. Then then pulled their funds out, having an obvious negative
effect on prices.

Michael Perelman
Economics Department
California State University
Chico, CA
95929
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