CBOT Owner Resists Wheat Restrictions

Wheat Markets

The attempt by the government to regulate and interfere with the wheat market could be another disaster in the making, as the completely foolish, misguided and clueless Democrats continue their assault on free markets.

According to Charles Carey, vice chairman of CBOT owner CME Group Inc., government restrictions on trading "are more likely to be harmful to the functioning of our markets than helpful," and he's absolutely right.

The idea that we should have some type of perfection in place so no one ever gets hurt is outrageous, socialist and fascist to the core. Short term fluctations in wheat prices will never last, and that's the illusory problem the goofy Democrats think needs to be solved.

Unbelievably, federal regulators are "seriously considering" restrictions in the wheat futures market being urged by lawmakers concerned over speculation they say has artificially inflated prices, supposedly interfering risk management by farmers and grain processors.

After a wasted year and time, a faux investigation by the investigative panel of the Senate Homeland Security and Governmental Affairs Committee found that the disconnect between the wheat futures and cash markets can mean higher prices for consumers. They say this with a straight face when corn prices and lack of planting of wheat does more to jack up the prices because of other government interference through subsidies from taxpayers dollars.

A number of senators have called on the Commodity Futures Trading Commission to restrict the volume of index trading in the wheat futures market on the Chicago Board of Trade, a completely ridiculous idea.

Foolishly, CFTC Chairman Gary Gensler told the Senate subcommittee at a recent hearing that the agency "is seriously considering this recommendation ... (and) will continue to closely monitor the performance of the wheat futures contract."

Democrat Panel chairman Carl Levin, ignorantly said such a review "is badly needed." Several other members of the committee, representing farm states, voiced concern about the impact of market problems on wheat producers in those states.

Again, to me much of this is to hide the real culprit in wheat prices, federal subsidies of corn for the failing corn-based ethanol industry, which is pushing up prices because of less acreage used for wheat because of the artifical price increases created by the U.S. government.

But an official of the company that operates the Chicago Board of Trade, where wheat futures are traded, opposed such constraints and disputed the Senate probe's findings, as mentiond above from Charles Carey's accurate comments.

The idea of attempting to manipulate the market by the U.S. government and Democrats will fail, as the utopian idea of reducing risk is completely foolish and always fails, and the wheat and commodities markets overall will suffer.

Commodity indexes include futures contracts for delivery in different months. Commodity index traders sell financial instruments whose values rise and fall along with the value of the index on which they are located.

Commodity index traders acquire wheat futures to help offset their risk from selling the instruments to third parties. That pumps billions of dollars into the market and lifts demand and prices for wheat futures, the faulty results of the Senate investigation found.

Other related to the risk factors are also whining about the alleged discrepencies, as one person representing the American Bakers Association and the Sara Lee Corp said at the hearing, "Bakers cannot escape the impact. Today's volatility represents millions of dollars daily in undue financial risk."

What this disingenous bureaucrat doesn't say is this has always been the case, and the those that manage this risk factor are the ones who win. In the stimulous and spirit of bailing out company after company, those that can't compete are attempting to make it look like something unusual is happening, when in fact it has been the practice and way of doing business for a long time.

The one who knows about this the best is Charles Carey, vice chairman of CBOT owner CME Group Inc., and he concludes that the findings of the Senate report "are based on faulty economic analysis and a misunderstanding of basic market economics."

Just look at what the Democrats and Obama are doing to destroy America with its socialist and fascist policies, and you can easily understand how this group of politicians are among the most inexperienced and naive in American history; in both foreign and domestic policy, and they need to just shut up and let the free market work things out, which it always has done.

Wheat Markets