Now of course commodities markets can be notoriously difficult to predict, these graphs aren’t decisive proofs by themselves and the Fed (to widespread scepticism) has denied that QE2 is a driver. The exact contribution of QE2 to these rises will be debated in PhD theses for decades to come. But the reality is that a rise in commodity prices is precisely what theory predicts would be a consequence of QE2, and the data give the same picture – we aren’t investigating a contentious mystery in the data; we are seeing precisely what we ought to have expected. There are lots of mechanisms. My favourite is the idea that further Fed easing solidified expectations in economies pegged to the dollar that monetary policies would have to remain ultra-loose, driving inflationary booms in those economies, reflected in rising commodity prices (this would be compatible with the Fed’s own story).