More and more signs validating my suspicions of politically engineered price suppression scheme being applied by regulators in the commodity markets
From the News Tribune
Having failed earlier this year to impose congressionally mandated limits on excessive speculation in commodities markets, a key regulator on Thursday called on the Obama administration to immediately impose temporary limits on some Wall Street investments.
"We were supposed to have these done earlier this year but have failed to do so," complained Bart Chilton, one of three Democrats on the Commodity Futures Trading Commission.
Chilton is calling for what are known as spot-month limits, which would restrict how much of trading can be done by a single trader or company in contracts for next-month delivery of crude oil, natural gas, wheat or any number of other commodities.
The influx of Wall Street money into commodities markets, some on behalf of large pension funds and other institutional investors, has resulted in financial players far outnumbering the traditional traders in these markets, where producers have sought to protect themselves from large price swings.
The flow of this Wall Street money has led to wild and volatile price swings in the price of everything from crude oil to cotton to coffee - hurting consumers and businesses.
It's also led some lawmakers, academics and market participants to conclude that the futures markets no longer work as intended. A series of reports this year by McClatchy Newspapers suggests futures prices now are often divorced from the underlying supply-and-demand fundamentals in many markets.
The real intended design has been to keep commodity prices low so that political stewards will be unconstrained to apply more policies geared towards inflationism.
In short, blame the unintended effects of the current policies as the cause of today’s woes.
As I previously pointed out, the great Ludwig von Mises has predicted this in 1945 (Planning for Freedom), as part of the inflation cycle—a feedback loop mechanism where inflationism begets price controls which leads to more inflationism
those engaged in futile and hopeless attempts to fight the inevitable consequences of inflation — the rise in prices — are masquerading their endeavors as a fight against inflation. While fighting the symptoms, they pretend to fight the root causes of the evil. And because they do not comprehend the causal relation between the increase in money in circulation and credit expansion on the one hand and the rise in prices on the other, they practically make things worse.
Regulators believe the myth that the law of demand and supply can be politically controlled or manipulated or repealed. If they succeed in imposing such policies, then these regulators would be sowing the seeds of economic perdition.
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