Senate hears testimony fingering big investors for speculation-driven rises in commodity prices.

[JohnWxy]

"Benn Steil, director of international economics with the Council on Foreign Relations, testified that the value of commodity index investments has grown by about one-third since the beginning of the year to more than $250 billion."


Funds blamed for stoking high commodity costs

Senate hears testimony fingering big investors for speculation-driven rises

By Ruth Mantell, MarketWatch
Last update: 2:52 p.m. EDT May 20, 2008

http://www.marketwatch.com/news/story/speculators-drive-food-energy-prices/story.aspx?guid=D4F1E194-F1B6-43BE-B0B4-4AE04874B5DC


Money floods into commodities

"I am here to expose a fast-growing yet virtually unnoticed factor, and one that presents a problem that can be expediently corrected through legislative policy action," said Michael Masters, managing member with Masters Capital Management LLC, in testimony prepared for the Senate hearing.
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....according to Masters, institutional investors such as corporate and government pension funds, sovereign wealth funds and university endowments -- relatively new participants in the commodities futures markets -- are creating a demand shock. Specifically, he cited index speculators who allocate a portion of their portfolios to commodities investments that track popular indexes such as the Dow Jones-AIG Commodity Index.

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[librechik]

1. get on this right away, legislators

we can do something about this!