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Comment for Proposed Rule 76 FR 4752

  • From: David Murray
    Organization(s):

    Comment No: 32143
    Date: 3/23/2011

    Comment Text:

    The reasons for today’s highly volatile commodity prices are many but clearly excessive speculation must take its fair share of blame (see studies by members of University of London, UNCTAD, the US Senate, FAO, Yale, MIT, Princeton, Citigroup & the Petersen Institute).

    So it is good that the Commission appears to want to put the Dodd-Frank Act into practice as extensively as possible particularly reforms focussed on limiting excessive speculation in food and energy commodities.

    I therefore urge the Commission to implement the proposed rules regarding aggregate speculative position limits to prevent excessive speculation. At this time of fragile economic recovery, we cannot allow speculators to unduly affect our food and energy prices.

    Congress called for exemptions from these limits for bona fide hedgers. I ask that the Commission define that term in the strictest sense possible, limiting exemptions to businesses that deal in physical commodities and use markets to hedge commercial risk in those commodities. Banks, hedge funds, private equity and all passive investors in commodities should not be deemed as bona fide hedgers. Institutions hedging price directional bets such as commodity index swaps, Exchange Traded Funds and Exchange Traded Notes also should not be considered as bona fide hedgers.

    In summary, I ask that

    although Wall Street is telling the CFTC not to establish these limits, to avoid food and energy price bubbles, the proposed speculation limits be implemented.
    and
    no exemptions be given to banks, hedge funds or other financial players. Only give exemptions to businesses that deal in physical commodities, such as gas stations, farmers, etc.

    Thank you

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