Comment Text:
I applaud 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, the Petersen Institute, the University of London, Yale, UNCTAD, the FAO, and the U.S. Senate. This speculation has caused food to become unafforrdable for many people around the world.
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 our food and energy prices. This kind of gambling is immoral.
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. Banks have already caused us too much grief. No exemptions for them should be allowed.
