irondoor91

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  • The 'Commodity Speculators': What's Everyone Worrying About?
    According to the long/short hedge fund "expert" who testified before congress, "commodity index speculators", primarily other hedge funds and institutional investors such as the pension funds you cite, are driving up the prices of all commodities.

    In his testimony he made the point that these folks only purchase "long-only" index positions and that they "never sell". Now, according to Webster, the definition of a "speculator" is someone who takes unusual business risk and seeks to maximize their profits. That seems to me to be someone much like a hedge fund, perhaps even a "long/short" hedge fund.

    On the other hand, Webster defines an "investor" as someone who commits capital in order to gain a financial return. That return may be in the form of dividends, interest, capital appreciation or merely the safety of the original investment.

    It appears to me that since our "expert" acknowledged that the institutional investors with whom he was familiar "never sold", they have satisfied the definition of "investors" and are not speculators as he would have congress believe.

    I suspect that as you suggest, they are merely attempting to hedge the other 98% of their portfolios that they see going down the tubes due to the anemic performance of equities and fixed income investments, thanks to the bankrupt policies of our governmental leadership whose answer to our economic problems is to borrow a few hundred billion more from the Chinese so that they can buy votes with the ridiculous $600 "stimulus" checks. Absolutely insanity all around.

    Go speculators.
    May 29 12:35 pm |Rating: 0 0 |Link to Comment |View article

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