U.S. Congress could ban speculators from commodities
Bloomberg News
WASHINGTON: The chairman of a Senate oversight committee has said he is considering legislation to place limits on large institutional investors in commodities markets, which have posted record prices this year in agricultural products and oil.
The legislation would be aimed at speculators and other investors who use commodities as a way to hedge against swings in other investment instruments like stocks and the dollar, said Joseph Lieberman, chairman of the Senate Homeland Security and Government Affairs Committee, at a hearing Tuesday.
Crude oil reached $132.25 a barrel Wednesday, the highest price ever, and it has almost doubled in the past 12 months. Wheat, corn, soybeans and rice have all set record highs this year on the Chicago Board of Trade, spurring food inflation. The Reuters/Jefferies CRB index of 19 commodities surged 31 percent in the year that ended April 30.
"We may need to limit the opportunity people have to maximize their profits because a lot of the rest of us are paying through the nose, including some who can't afford it," said Lieberman, Independent of Connecticut.
The plunging value of the dollar, the U.S. housing crisis and widespread problems in the banking sector have led investors away from traditional instruments and toward commodities, witnesses said. |
