Flooding the Commodities Market and Driving Down Crude Oil Pricing

Title: Flooding the Commodities Market and Driving Down Crude Oil Pricing

Student’s Name:

Institution

Thesis: Flooding the Commodities Market and Driving Down Crude Oil Pricing

Main Point: International trade deals with the exchange of goods and services through exports and imports. A deficit caused by the surplus of importation. This means that demand for foreign items have increased more than the consumption of local production.  On the other hand, foreign exchange involves the currency value of one’s country against the other. The fluctuation of both may cause inflation in the economy (Wray, 2008). Understanding the changing pattern in economic growth can improve the stability of the economy.   These securities are determined by the availability to acquire commodities such as food, clothing, shelter and health care. Economic factors influence the ability to access such needs and wants essential to an individual either as a single person or family. Satisfying these needs varies with the economy of goods and services that determine the price level.

Main Point:  The economy that influences lives varies with the standard of living and employment opportunities. Increase in the cost of living also known as inflation plays a role in the high prices of goods and services. The price indexes may vary as per the rate of the market accessibility and survival of the people within the country. Income opportunities also play a key factor in the ability to earn money so as to be able to acquire goods and services vital for survival. In the inflation of an economy, most employers opt to minimize the employment rate so as to maximize their profit margin (Rejda, 2012). This raises the standard of living in that depending on the income level of an individual determines their ability to afford attaining certain goods and service for their basic needs and wants.

Main Point:  Trading companies modify their objective by shifting focus to maximize profits. Increased demand for cheaper labor causes the relocation of industries to areas of low average wages and increases profit margin. In addition, consumers reduce their spending patterns due to the inflation insecurity concern thus low spending and high saving affecting the Gross Domestic Product performance (Fan & Xu, 2011). The U.S. current economic state faces a state of instability as a result policies establishment is key to improve living standard of people living the world’s leading economy country.

References

Wray, L. R. (2008). The commodities market bubble: money manager capitalism and the financialization of commodities (No. 96). Public policy brief//Jerome Levy Economics Institute of Bard College.

Fan, Y., & Xu, J. H. (2011). What has driven oil prices since 2000? A structural change perspective. Energy Economics, 33(6), 1082-1094.

Rejda, G. E. (2012). Social insurance and economic security. ME Sharpe.