Forum Post: Ban commodity index funds, Regulate Speculation.
Posted 12 years ago on March 21, 2012, 12:36 p.m. EST by scottystrange
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The powers that be are not going to just shut down Wall Street, but, we can get them to pass bills that may regulate it. The biggest problem I see is commodity speculation and commodity index funds. Commodity speculation needs to be regulated and the commodity index funds that the investment banks are pushing need to be banned. This is what should read on the protest banners, a solid answer or start at least to fixing the problem. You see, these speculations and index funds are what is driving up the prices of gas, food, housing and energy. While the 1% are also paying these high prices, they are making so much money off these investments that the higher prices in commodities have no real effect on them, only on the 99%. We can get bills signed to ban and regulate this and Occupy Wall Street will have answers to its cause. BAN COMMODITY INDEX FUNDS, REGULATE SPECULATION.
Three articles that speak to the gist of this 'forum-post' :
a) "The Ascendence of Sociopaths in US Governance", by Doug Casey ; http://www.informationclearinghouse.info/article30892.htm ,
b) "Corporate Malfeasance – And Why It Corrupts", by John Perkins : http://www.informationclearinghouse.info/article30837.htm &
c) "'Big Government' Isn't the Problem, Big Money Is", by Robert Reich : http://www.informationclearinghouse.info/article30903.htm .
radix omnium malorum est cupiditas ...
It might help.
I think we have much bigger fish to fry. I mean, futures trading on commodities provides people like farmers with a way to hedge against the risk of things like bad weather, so these instruments are useful in some cases. What we should be doing is looking for ways to replace dirty oil. The only way that happens is if it becomes more expensive. In the short run, domestic exploitation of our resources would be easier (but frankly, I'm not inclined to support that either).
There is ample evidence that excessive speculation in commodity markets is influencing prices. Go here - http://www2.weed-online.org/uploads/evidence_on_impact_of_commodity_speculation.pdf - for almost 100 studies on the issue.
When outside speculators were 20-30% of commodity markets (as they were from the 1936 until early this century) with physical hedgers being the other 70-80%, they provided helpful liquidity. But because of deregulation, that ratio has reversed, so now speculators are 70-80% of most markets with physical hedgers leaving the markets because they are so volatile and expensive.
Hundreds of organizations are working to re-regulate commodity markets. We have a lot of info on the issue at www.stopgamblingonhunger.com.
Speculation in the derivative market is regulated... its called the CFTC. If your problem is that the prices are too high because of the speculators, than you have no argument. Speculation is driven by demand, the consumers. If consumers are buying a shit ton of gas, guess what? Speculators will buy and sell at higher prices. Of course geo political events also play a role, but for the most part, its your fault prices are so high.
U so stupid. Or do you think we're stupid. Please shut up and go away.
No speculation for non material players, period. No looting financial instruments, period.
Solid argument... but not really. You people don't understand that speculators are actually essential to the market. Speculators provide liquidity which allows for the fluctuation of prices. If speculators didn't exist, people would constantly be paying the spot price for commodities, which would actually make the price of commodities more unstable. The point is, we need a liquid market, and speculators provide that, no matter what condition our economy is in.
Speculators are not essential to any market. The commodity producers like them because they artificially create higher demand, so higher prices. Where does the speculators profit come from? From the end user paying higher prices.
Yes they are. You just lroved you are stooopid. Stoooooooopid.
Example: I am a corn grower. Say it costs $1.50 a bushel to grow corn but a speculator comes alomg and says I will buy all your corn for $2 bushel. if i grew a million bushels, i just insured i will make $500000 this season.
So the farmer gets a guaranteed higher price, and a higher profit. The speculator, an extra middleman, takes a profit. Someone pays for these two extra costs, the end user.
yeah, but what is the price of corn falls to $1.00? The speculater loses his shirt.
On average he makes a profit. If he didn't, he would speculate in other markets. Oil, gold, real estate, currency. Even concert tickets. A ticket scalper creates a higher demand for the ticket seller, which raises ticket prices at the box office, and a shortage of tickets overall, which raises prices even higher for the ticket buyer.
So thank you for admitting i was right. Most appreciated.
What happens when the farmer cannot fulfill the contract due to disease or drought? He has to pay for what he can't deliver. His profit is not guaranteed.
noted
That is slick. Change topics entirely. The same thing would happen whether there were speculators or not. You arent real bright, are you?
Your already a proven poor speculator. A true speculator if it actually approached a singular original source would offer less per bushel then market value and try to resell for more than actual market price.
Farmer owned farms get shit for their produce. Corporate Farms make a killing.
Speculators without the facilities for the use, transportation, storage,etc. of essential commodities should simply not be allowed into the game.
Economic bloodsuckers who offer nothing in return are a criminal element and should be treated as such.
If they hold on to a commodity contract long enough, they do have to pay for storage and transportation. And once again, they are let into the market because they provide liquidity which is essential to our economy, not just essential to the derivatives market. Without speculators, Hedgers couldnt exist, and hedgers provide a great service to small companies and our economy.
There is nothing 'criminal' about making money where theres an oppportunity.
This whole speculation argument is such a joke. Speculators cannot move markets, period. If I want to buy an oil futures contract, someone has to sell it to me. Speculative trades are all 2 sided, a buyer and seller. If I buy a futures contract, I think oil is going up in cost. The seller thinks it is going down. It a very high stakes poker game where every player is an absolute expert in oil futures contracts. Everyone of them is armed with reams of data on spot oil prices worldwide.
If i were to dig a well in my backyard and find oil reserves of 3 trillion barrels, anyone speculating on rising oil prices would be destroyed financially.
Read about the Hunt bothers attempt to corner the silver market in the 70's http://en.wikipedia.org/wiki/Nelson_Bunker_Hunt
Oh, and LAWLZ at you nerds for disliking my comment even though I'm right. Just goes to show how intelligent this movement is...
Yes!
It's a good thing you idiots will never get any of this silly shit actually done.
Sheesh farmerbrown? We already have a farmer (joe) couldn't you be his Bro the plumber?
Will you be dedicating your time to digging holes?
farmerbrown
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Regulate futures speculation. Stop inflation due to pure profit seeking. Oil speculation has driven up the cost for everything resulting in a strangled economy.