Funny money

Like bear markets, recessions and pornography, financial bubbles are easier to recognise than to define precisely. Roughly speaking, they are characterised by the price of something rising much more quickly than its cost of production. Bubbles are also marked by widespread enthusiastic expectations for further gains. By that definition, commodities are now a bubble. Prices have been rising fast. The S&P GSCI commodities index is up 74% in the last twelve months. The price of iron ore in the benc...