Raw material bubble

The – hasty rise in commodity prices, especially for oil and metals, and in particular for copper, – which can hardly be explained by normal supply and demand conditions on the respective market, and – which indicates temporary speculative buying. – Experience shows that such periods of high prices are sooner or later followed by unexpected sales on a large scale, which can lead to a price collapse with the financial ruin of many stockholders. Central banks do monitor commodity markets for such periods of exaggeration. However, it has been shown that “real” bubbles are difficult to detect accurately, even with the tools of market research. – See bubble, speculative, dotcom bubble, financialization, real estate bubble, air pocket, Martin principle, Poseidon bubble, feedback loop, speculation, tulip crash, exuberance, unreasonable, asset bubble, two-pillar principle. – Cf. ECB Monthly Bulletin of September 2008, p. 21 (Fluctuations in commodity prices depending on speculators; overview), BaFin Annual Report 2011, p. 44 f. (Approaches to global regulation of commodity markets).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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