Very interesting piece from the Financial Times today regarding dry shipping rates in the Far East -- the article's premise is based on an interview with Nobu Su, chief executive of family-owned Taiwan Maritime Transport (TMT), one of the largest dry bulk shippers globally. Salient quote from the interview: when asked about day rates, or the rates shippers charge clients to charter out their ships, rising 300% this year, CEO Su called the rates "insane."

Su's main concern was that with inflated day rates, customers using dry shippers, mainly mining companies, would be forced to pass on the costs to their customers -- ultimately, you and me.

"We believe it's unsustainable and shipping people forget about their own business, which is providing shipping services," Su said of the market conditions, where owners of the largest ships, can command about $180,000 a day in charter rates. "TMT has been in the shipping business for 50 years. We continue to do the basic business."

Investors have certainly profited from this trend. If you had owned DryShips (NASDAQ: DRYS) this year, you would have 400% more than what you started with at the beginning of 2007. According to Reuters, the company's fleet consists of five Capesize drybulk carriers, 29 Panamax drybulk carriers, and one Handymax drybulk carrier.

It's worth thinking about 2008 and beyond. There are a couple of questions investors should be asking. Are "insane" day rates pushing on pricing that's elastic or inelastic for many of the mining companies? If prices prove to be elastic, will we see day rates drop along with new ships coming online? If prices are inelastic and Chinese demand continues to sustain rates, can we see another year of large gains?

Zack Miller is the Managing Editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.