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Producers versus Speculators~ Problem of the Age?
As we monitored derivative positions for Weekly Asset Allocation in the Big4 to determine demand and supply relationships and primary price trends, we noticed in many contracts the Speculators became larger market participants than the Producers, sometimes called Commercials.
This does not adversely affect Big4, because a buy is a buy and a sell is a sell. Those with the most money have the most market power to move price.
Like Keynes, we wonder about the effect of excess speculation on our economy and those who depend on it.
While the Great Gift Panic of 2008 we wrote about in 1400+ pages came and went, lowering real estate and pension prices for most, with lessons of leverage learned, it seems somehow not to have affected the biggest Speculators.
If anything, we may have more speculative activity than we did two years ago.
When a highly leveraged hedge fund manager can move a market higher or lower by buying and selling for speculative operations, does this really benefit our economy by hedging risk?
Or does it become just another form of monopoly or rigged casino?
We ultimately leave this for Congress, the Courts, CFTC, Fed, President, SEC and Treasury to consider, decide and enforce as part of doing their job.
Meanwhile, let’s feel free to contact them to voice our considered polite thoughts.
After all, we pay their higher benefits and salaries.
Lately, we in the economy have not done as well as government, which has grown faster than economy and population combined.
http://www.federalreserve.gov/
http://www.supremecourtus.gov/
