Bill would rein in trading in energy futures

...Congress is preparing to rein in speculative trading in energy futures markets by major institutional investors and hedge funds, which is seen as a key factor in driving up oil prices.

Legislation introduced Friday by Sens. Dianne Feinstein, D-Calif., and Ted Stevens, R-Alaska, would require the Commodity Futures Trading Commission to set limits on how much these investors - including pension and retirements funds - can invest in certain ... Full Story »

Posted by Beth Wellington

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Jonathan Cole
3.6
by Jonathan Cole - Oct. 1, 2008

This is reporting, not journalism. Journalism should include analysis which this story does not. Speculation in commodities markets is both an effect and a cause of speculative bubbles that artificially force companies to keep churning more and more materials from the earth. The more materials they extract, the more they have to sell in order to pay for their investments in new capacity which is spurred on by speculative bubbles that raise the prices. This is a never ending feedback loop that will destroy the natural foundations of the world including the humans. Instead of investing in new capacity for extracting virgin materials these companies should be investing in technologies that reprocess discarded materials economically. They will then make greater profits as the price drops, because it takes much less energy to reprocess used materials than extracting new ones. By mixing in this lower cost feedstock with their virgin materials, their costs go down. 100% of discarded refined materials is no different than flushing money down the toilet. A simple solution to this is to put a 75% tax on commodities profits where actual delivery of the material is not taken. Put this tax to use in developing technologies and systems to recapture the materials now being buried in landfills and clogging the ocean.

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