RADAR - Speculators are dumping their money into the markets and creating bizarre feedback loop in which speculator demand increases as prices rise. Or so says Michael W. Masters a hedge fund manager who testified before the Senate Homeland Security and Government Affairs Committee. . .
Addressing the argument that ethanol production has resulted in less food production, he points out that "Index Speculators have stockpiled enough corn futures to potentially fuel the United States ethanol industry at full capacity for a year." In addition, speculators are currently sitting on enough wheat futures to supply every American with "all the baked goods they can eat for the next two years."
"Think about it this way," Masters told the committee. "If Wall Street concocted a scheme whereby investors bought large amounts of pharmaceutical drugs and medical devices in order to profit from the resulting increase in prices, making these essential items unaffordable to sick and dying people, society would be justly outraged. Why is there not outrage over the fact that Americans must pay drastically more to feed their families, fuel their cars, and heat their homes?"
Addressing the argument that ethanol production has resulted in less food production, he points out that "Index Speculators have stockpiled enough corn futures to potentially fuel the United States ethanol industry at full capacity for a year." In addition, speculators are currently sitting on enough wheat futures to supply every American with "all the baked goods they can eat for the next two years."
"Think about it this way," Masters told the committee. "If Wall Street concocted a scheme whereby investors bought large amounts of pharmaceutical drugs and medical devices in order to profit from the resulting increase in prices, making these essential items unaffordable to sick and dying people, society would be justly outraged. Why is there not outrage over the fact that Americans must pay drastically more to feed their families, fuel their cars, and heat their homes?"
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