US Senate hears no agreement on role of speculators in high commodity prices

[Robbien]

Source: Forbes

WASHINGTON (Thomson Financial) - Speculation in commodities has or has not played a major role in the run-up of global energy and food prices depending on which regulator, economist or trade group you ask; that was the conclusion of a Senate hearing today.

. . .

'Are institutional investors and hedge funds contributing to food and energy price inflation?' was the question, and the committee did not come out of the hearing with an answer.

Jeffrey Harris, the chief economist for the chief regulator involved, the Commodities Futures Trading Commission (CFTC), said no, Wall Street investors were not pushing up prices. 'Little economic evidence exists that futures prices are being systematically driven by speculators in markets,' Harris said. 'The level of speculation in commodity and crude oil markets has remained relatively constant as prices have risen.'

. . .

Tom Buis of the National Farmers Union complained that the sheer volume of financial speculation is making it almost impossible for farmers to do the traditional price hedging in commodity markets that they have used for years to protect their financial positions.

'I have heard from numerous farmers that they can no longer forward price their commodities for delivery after harvest any more than 60 days in advance,' he said. The result is that the farmers who are paying record amounts of fuel and fertilizer costs related to oil 'cannot capitalize on the higher commodity prices to protect their financial risk.'

Read more: http://www.forbes.com/markets/feeds/afx/2008/05/20/afx5030041.html

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To summarize proceedings:

Hedge funders say no we are not to blame, trust us. They give no documentation of their statements.

Think tanks, investment bankers and farmers all separately say speculation is to blame and give documentation.

Senate Committee thus concludes since there are differing opinions, there is nothing to be done.

Our government in action.

[DJ13]

1. Typical DC whitewash to say they did something

[Vincardog]

2. Their government's inaction nothing can be done by this group to curb the rise of Capital's rape

of the whole society. Bow before their god $$$$$$

[Dover]

9. Just another Government Inaction Committee. ..nt

[DiverDave]

3. The fucking bottom line is their god

and if you get in the way, well, been nice knowing ya.

Once again we see that washington has the god damned corporations to take care of, not "we the people"

[jackster]

4. On a normal day after reading this...

I would be firing off an email to Sen Kennedy giving him my two cents!

[WarhammerTwo]

5. Close the Loop Hole

Wanna get teh speculators in line? Follow the link:

http://www.closetheenronloophole.com/

Sign up, write your Congress-people and then forward the link on to your friends and neighbors.

Later gators.

[chill_wind]

6. Done. Thank you. You should create a free-standing post with this info.

eom

[Dover]

8. What might I offer my congress critter to compete with the perks and job waiting for him

in one of these hedge fund companies? Like trying to get an old trail riding horse to forget the way back to the barn and his meal, and do what the rider wants instead.

Corruption always leads to the trough.

[chill_wind]

7. # 5..

[On the Road]

10. If I Understand Their Drift, This is Irrelevant:

'The level of speculation in commodity and crude oil markets has remained relatively constant as prices have risen.'

What makes all the difference is whether the speculative interest is long or short.