Real Demand vs Hedge Fund Demand

I have had it with the constant jabbering that commodities prices were / are / have been determined by "real demand" by emerging economies etc. It is and has been clear that the bubble in commodities prices was created by artificial demand by hedge fund buying and indirectly by the suckers managing pension funds who were pulled into investing in hedge funds and commodity funds as an "asset class" creating additional "investor" demand for various commodities.

It is finally becoming clear to those who were propagating the idea there was "real demand" in the sector that they were wrong. The demand was artificial and this artificial demand inflated the sector and is now rapidly unraveling. This quote from a Dow Jones News Wire report today highlights this reality.

The economic slowdown is far from the only worry for agriculture stocks: hedge funds are facing requests from clients for redemptions and are forced to sell their holdings. That's affecting commodity prices and the prices of commodity stocks that hedge funds rode up to their peaks in the summer.

This statement solidifies the reality that demand for commodities was artificial, driven by hedge fund buying and is now imploding.

Sorry for the farmers who stockpiled grains anticipating further gains as they have watched the value of their stocks decline by 50% in recent months.

Perhaps some of this is coming to light with this part of the report exposing the suspicions of some in government all along that prices were being manipulated:

The run-up in fertilizer prices earlier this year also drew scrutiny on Capitol Hill. Sen. Byron Dorgan, a Democrat from North Dakota, asked the Federal Trade Commission to investigate pricing practices in the industry. Dorgan had met with farmers in his state concerned about the increases.

Need I say more?