There has been a lot of talk lately on whether "spec funds" -- speculators -- are having an impact on oil and agriculture futures. Or all commodity markets, really, since numbers just don't always seem to add up.
Mike Krutza, formerly with Farm Credit Services but now a partner in Lighthouse Leadership, told Brownfield that research shows all commodities, but especially oil and corn, are influenced by speculators. He mentioned the “Enron Loophole” -- created when Congress decided to change the rules for investing in commodities. We blogged about this here.
He said part of the problem is the Commodity Futures Trading Commission does not have the ability to regulate this activity and we're all stuck with consequences -- commodity prices that don't reflect their real value.
Krutza said he believes the government should step and get the spec funds out, but this should be done carefully so we don't over regulate markets and stifle creativity.
The full article, by Brownfield's Bob Meyer, and related audio is available here.
No comments:
Post a Comment