New Government Regulation would limit your profits
July 19, 2009 12:32am CST
The government, The Commodity Futures Trading Commission, wants to limit how much money you can make in the Commodity Futures Market. Because some people make big money in the buying and selling of futures in Gasoline and Oil last year they are being blamed for the increase in the price of oil and gasoline. What the regulators want to do is to limit the amount of futures contracts that a person or group could buy. I guess the thinking is that if you can not buy a large futures contract or multiple contracts the price will stay low. Who are these "speculators" who are forcing up the prices on us to make a profit (now considered a dirty word and may soon be banned on some websites as obscene). Last year the price of Oil and Gasoline was going up daily and people were worried and the news caster were blaming the "Evil Speculators", but who were those Speculators. Some were people who were willing to take a risk and hope to profit from the increase in price. There were others who were trying to secure a set price so they could control costs. I received a notice from my utility company that I could lock in the price of my heating if I signed up by October 1 and agree to a fixed, no increase for one heating year, price for my gas. Since the Utilities are big volume buyers they do have some influence on the price and would be effected by this new rule change. Once again the government sees only one thing and does not understand about the rule of unintended consequences. All the institutional buyers, such as utilities, airlines, truck and Auto fleet owners, bus operators, etc, would be effectively barred from locking in their cost and would have to pay the market price and have their cost go all over the place. The other large group to suffer is the pension funds. They may trade in Exchange Traded Commodities or ETF's. Which is like a stock except it deals with one commodity or the Futures market. The regulators think if they can regulate something they can keep the price down or up which ever they want. The sad truth is that almost every time they try to regulate to control the price it fails and often leads to shortages or higher prices. President Roosevelt and President Nixon tried wage and price controls and both times it seemed to work in the short run but in the long run it was a failure. In the 60's and 70's their had strict regulations on what credit card companies and banks could charge for interest. The banks were losing money so they charged the maximum interest to everyone. Home mortgages went up to 14% (maximum was 18%) Since they could not control the interest rate they controlled the amount of credit you could have. Credit cards had credit limits of $300 to $500. As the regulations were reduced under President Reagan the economy started to grow and personal income increased, tax rates were reduced and tax revenue to the government increased. Less regulation meant lower prices more competition, a stronger economy and increased net worth for everyone.
• United States
19 Jul 09
This administration is out to destroy our economy.... the goal is socialist world government. That cannot happen as easily is the economy is running well. This whole economic crisis was engineered by the international bankers who own the FED. All of these regulations are deliberately designed to hurt business and the economy for the benefit of the elitists and the international corporations. People need to wake up and take notice.
20 Apr 10
I agree with Destiny007. You don't own your FED. International bankers with European roots own your FED. They have succeeded in making American people believe the FED is a U.S. government-related institution. It's not. By tracing its roots, you will arrive to conclusion that your FED is not pro-American. They are actually anti-American. Trace your history. Your forefathers and your early presidents opposed the establishment of FED or any central bank. Now, your enemy have succeeded and look like they are further succeeding in destroying your country.