Apr 3rd 2008 1:49AM High pricing isnt fraud, its high prices. If you pay for it you agree that the item is worth that much gold, or you simply werent paying attention.
About players buying everything in the AH and selling it for higher prices, just have a little patience, prices in the AH tend to go down as more people put things in for sale(as there's a tendency to drive prices lower so your items get bought first)
Stuff like wool and silk isnt commonly farmed, so prices tend to go up and stay up. Its up to you to decide wether its worth buying it or farming it.
If something is overpriced, dont buy it, the seller will eventually notice that the price is too high and no one is buying, and will eventually lower the prices.
The real problem in the economy of WoW is inflation, there's too much money being created everyday, this makes prices go up as there's barely any escape valve for money (only mounts and repair bills) so money just keeps building up in the economy.