"...the Reuters-Jefferies ...global commodities benchmark, has since hit a two-year high as part of an 18 percent gain since the start of September when markets began to anticipate U.S. action.
...critics have said QE2 -- so called because this is the second round of quantitative easing -- could lead to high inflation and low interest rates would create asset bubbles as investors sought returns by piling into riskier asset classes.
Dollar-denominated commodities are particularly attractive to non-dollar investors when the U.S. currency weakens.
"The trouble is Bernanke writes off commodity inflation, claiming our economy is no longer very dependent on commodity prices,"...
On Friday, international benchmark U.S. crude and London copper hit their highest levels since 2008.
Saudi Oil Minister Ali al-Naimi said on Monday consumers could be comfortable with an oil price between $70 and $90 a barrel...
Naimi until this week had stuck resolutely to a preferred $70-to-$80 range for producers and consumers...
..."In summary, while QE may boost assets prices further and hence contribute to positive wealth effects and inflation expectations in the U.S. economy, recent moves in oil prices, in particular, may drag on economic growth in the short term,"...
...the oil market, in contrast to the rally of 2008 when it hit a record of nearly $150 a barrel, is amply supplied...
...Fuel inventories in the United States, the world's biggest oil burner, reached record levels in September and overall stocks are still higher than a year ago.
"While the worries surrounding excessive price volatility and the role of speculation have somewhat diminished over the past 12 months or so, it is essential we do not forget the price extremes that the market witnessed back in 2008,"..."
Barbara Lewis and Nick Trevethan
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