Comment Text:
I applaud the Commodities Futures Trading Commission (CFTC) efforts to implement the Dodd-Frank Act as thoroughly as possible, especially reforms aimed at limiting excessive speculation in food and energy commodities.
Although Wall Street is telling the CFTC not to establish these limits, in order to avoid food and energy price bubbles, the proposed speculation limits must be implemented.
While many factors contribute to today’s highly volatile commodity prices, it is clear that excessive speculation is partially responsible, as shown in dozens of studies by members of respected institutions such as Princeton, MIT, Citigroup, Petersen Institute, University of London, Yale, UNCTAD, FAO, and the USA Senate.
I 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 food and energy prices.
The USA Congress called for exemptions from these limits for bona fide hedgers. I request that the Commission define that term in the strictest sense possible, limiting exemptions to businesses that deal in physical commodities (like farmers, gas stations and so on) 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. Do not give any exemptions to banks, hedge funds or other financial casino economy players.
Thank you for your consideration.
