The home building/rebuilding boom and the rebuilding of Iraq are not complementary and putting a strain on the lumber industry according to Timothy Terrel in this article appearing today on Mises.org.
Low interest loans fueling the high rate of remodeling and new home construction here in the states, the latter not seen in 17 years, have certainly contributed to shortages and record high costs of lumber.
The DoD ordering supplies for Iraq made matters worse since it occurred during a peak buying season.
Terrel also cites what he describes as deliberate actions to artifically inflate the costs of lumber in order to ‘soak’ the consumer such as using environmental measures to ‘cordone off protected areas’ and imposition of Canadian tariffs.
Temporary problem or crisis looming? Whichever it might be I wouldn’t be surprised if the Bushies call for the repealing of environmental protections in order to fight the war on terror.