Comment Text:
Dear Sirs,
Whilst I applaud the Commission’s efforts to implement the Dodd-Frank Act as thoroughly as possible (particularly reforms limiting excessive speculation on food and energy), I have two key points to make:
1. In order to avoid food and energy price bubbles like those which occurred in 2008, the CFTC should implement the proposed speculation limits.
2. Only give exemptions to businesses that deal in physical commodities (like farmers, gas stations, etc.). Do not give any exemptions to banks, hedge funds or other financial players.
My motive is humanitarian and ethical, whilst I appreciate the myriad other factors involved.
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.
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.
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.
Best regards,
Dr Chris Gleed-Owen
