The cost of goods, from fuel to food, may not actually be as high as what we pay at the pump or the market. Those costs may be driven up by speculation on commodities markets, whose demand and supply patterns in turn affect consumer pricing.

The commodities market has grown by a factor of twenty over the course of a decade, stirring up suspicion from Congress, which is now considering regulation. Senator Lieberman told reporters that “This unbridled growth raises justifiable concerns that speculative demand -- divorced from market realities -- is driving food and energy price inflation and causing a lot of human suffering."

The problem comes when a buyer invests heavily in a commodity specifically to affect the market or price, and the buy is taken as a signal by other traders as a demand increase, causing them to buy, which triggers other buys, and so on until the price is significantly higher than the both the value and demand. The real life results of such a speculative run are an overabundance of the supply. The supply overabundance causes a market crash when no one will buy the product from sellers, who are forced to sell very cheaply, often at a loss. It is usually impossible for investors to distinguish genuine market signals from speculative ones.

There is debate over whether speculation, or external factors like weather, demand, and the exchange rate are driving up market prices. Congress is legislating to fix the ‘Enron loophole’ -- the market flexibility and lack of oversight that infamous energy firm Enron took advantage of to cause California’s 2001 speculation driven energy crisis.  A bipartisan issue, even Republicans from oil rich states like Texas are joining forces with Democrats to put some reigns on commodities trading.