Comment Text:
I support the Commission’s efforts to implement the Dodd-Frank Act as thoroughly as possible especially reforms aimed at limiting excessive speculation in food and energy commodities.
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 U.S. Senate.
In order to avoid food and energy price bubbles as happened in 2008, I urge the Commission to implement the proposed speculation limits. We must prevent excessive speculation. At this time of fragile economic recovery, we cannot allow speculators to unduly affect our food and energy prices. Food is a basic need and we should ensure the hedging system is not abused.
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 as they never buy the end product. 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.
Thank you for your consideration,
