The "Carry Trade" and commodity prices

  1. Jed Fisher profile image88
    Jed Fisherposted 6 years ago

    A business that can't otherwise get credit can put down ten cents on the dollar for a letter of credit to purchase a commodity, then put that commodity up as collateral against a cash loan. This causes the price of commodities to go up. Most noteably, oil. That is why gas is $4.