Gov't moves to limit speculative commodity trades

Government policies in regards to money management and supply relative to demand, not speculation, drive up commodity prices. Speculators, regardless of their size, cannot create or maintain a trend not supported by long-term secular cycles and fundamentals. Like it or not, speculators provide the grease for the wheels of capital flows. They are just as often slaughtered by their own emotions as profiteers of their hot money chasing unsustainable trends.

If talk turns into action, limited participation will alter the control structure of silver and to lesser extent gold.

Headline: Gov't moves to limit speculative commodity trades

Federal regulators took a step Thursday to limit speculative trading of oil, food products and other commodities, responding to critics who say that has driven up consumer prices.

The Commodity Futures Trading Commission proposed limiting the volume of futures contracts that financial investors can trade for 28 commodities. The panel voted 4-1 to advance the rule, which opens it to public comment.

The restrictions are aimed at Wall Street firms and others who trade them to profit from swings in market prices. Agricultural companies, airlines and others who use futures trading to hedge against price changes would not be affected.

Source: finance.yahoo.com