tag:blogger.com,1999:blog-1527766217650773141.post6066201516982606001..comments2023-07-12T06:12:30.772-07:00Comments on Demand Side Transcript: Transcript 461: Forecast CommoditiesAlanhttp://www.blogger.com/profile/07323700324276425194noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-1527766217650773141.post-10402817866525164602011-10-04T17:53:50.978-07:002011-10-04T17:53:50.978-07:00One of the problems with definitions of assets and...One of the problems with definitions of assets and investment is that the units of production can be very interchangeable. A construction worker can build a factory which is investment, even renovating and improving a factory can be investment. The problem is that the same workers can build houses which really become just goods. Even improving that property is just adding to it but still not investment because it does not increase the output potential of the economy. <br /><br />As for commodities I see falls for a while, until real world demand balances supply. Longer term those prices will be higher as world population grows and commodities become harder and harder to extract. Though this would be over multiple decades, and there will be many cycles in commodity prices before then. The EU suggestion of a Tobin tax on commodities might stabilise the markets somewhat as it might squeeze non specialised investors out if the market. For consumers and manufacturers who would be the end users this would add very little to the costs but might stop the violent swings in the market.David Lazarusnoreply@blogger.com