Topic: Commodity Prices

Since President Obama took office in 2009, the price of sugar has nearly tripled, rising from approximately 11 cents per pound to a high of nearly 30 cents. While other commodities like gasoline have also seen increases, the sustained high price of sugar is noted alongside political "wars on sugar," such as Mayor Bloomberg's ban on large sugary drinks in New York City.

The discussion focuses on how gasoline prices are set at the pump, with the hosts claiming that oil companies "gouge" consumers based on what the market will bear. They explain that because refineries must maintain a continuous flow of product, prices are manipulated to ensure consumption stays at a level that prevents system backups. The lack of fixed-price margins is highlighted as a primary cause of volatility.

Famed investor Jim Rogers warns on CNBC about a looming crisis in soft commodities due to a global shortage of farmers. He notes that the average age of a farmer in the U.S. is 58 and that parts of Japan have no farmers left. Rogers argues that food price increases are driven by both supply shortages and the "debasement" of currency through quantitative easing (QE2).

The hosts review their long-standing prediction that gold would reach $1,300 an ounce, noting it is currently near that mark. While one host predicts gold could reach $5,000 or even $11,000 if the economy collapses, the other argues that gold has no intrinsic value outside of industrial use and dentistry. They briefly compare gold to other historical forms of currency like salt, shells, and seeds.

High oil prices are attributed to trading loopholes in the City of London, a unique financial entity with its own laws and mayor. The "Enron loophole" allows for excessive speculation in oil futures without the disclosure requirements typically found in US markets. The US government is reportedly attempting to pressure the City of London to adopt more transparent trading limits.

The hosts discuss the current spike in oil prices, comparing it to the "rigged" California energy crisis involving Enron. They reference the documentary "The Smartest Guys in the Room," produced by Mark Cuban, which exposed how energy traders intentionally caused blackouts to drive up prices. They suggest that similar manipulation is currently happening in the oil commodities market in London and Dubai.

Crude oil prices reaching $126 a barrel are attributed to speculative futures trading rather than supply issues, with predictions that costs could hit $200. The weakening US dollar has created a market where European tourists can purchase imported goods in America for significantly less than in their home countries.