Is more regulation the answer to high commodity prices?
ft.com/intl/cms/s/0/96a70cba-968c-11e0-afc5-00144feab49a.html#axzz1PORrPVOg">Sarko thinks so.
One of the chief dangers threatening growth today is the rising level of raw material prices… It risks keeping millions of men and women in poverty. It could lead to social unrest … which would threaten the cohesion of the poorest countries… We should extend regulation . . . We should encourage standardization of derivatives, and we should encourage their listing on regulation markets or platforms
Dude, get a clue.
I am so sick and tired of all these politicians blaming the markets and then acting all Warren G, calling for the regulators to mount up.
Fact of the matter is, high commodity prices has always been and always will be, their doing and I can’t help but agree with Yra Harris here.
Mr. Sarkozy, the European agricultural programs have done more to harm the emerging market farmers than any damage arising out of the commodity markets. The DOHA round would have been concluded long ago if not for the agricultural subsidies that countries like France and the U.S. supply to their farmers. I would argue that the ETHANOL and BIOFUELS programs of the developed nations have done the most to raise global food prices. So Mr. Sarkozy, remember that when you point your finger there are three more pointing back at you.
And that doesn’t just go for the oh so poor third world nations they’re trying to protect; for decades, thanks to all the subsidies Uncle Sam has provided, Americans pay way more than the prevailing world market prices for their own supplies - and they keep going up.
EM nations have followed this trend as well just to keep their own producers afloat; after sending out their quotas, they heavily tax and regulate any imports, restricting supply and further distorting domestic prices.
Now, let’s see what will happen if they get what they wanted; an uber regulated commodity derivatives market.
What do you think would happen?
What will it accomplish?
A whole lot of nothing if you ask me.
You?
I'd like to get (sar)cozy with her..
That last pic removed any feelings of incredulity I harbored for Mr. Sarkozy's comments. Now I'm just horny. Night WSO.
weak post....
Cops can't faze me, moma tried to raise me but had too many babies, Popa was a motha fuckin joke!
Commodity prices have to increase or we won't have half the commodites we have now in the future. You will see what i am talking about in the future, just watch. Time will be my redeemer.
In order to be redeemed, you have to take a controversial opinion. Your opinion may not be the most popular, but it's definitely not one that requires "redeeming". You read the Q1 Grantham letter? You should if you haven't already...
Grantham is not someone I typically follow but I shall check it out.
You mean this letter? http://www.gmo.com/websitecontent/JGLetterPart2_1Q11.pdf
Honestly I have been researching 6 sigma events (historically) since I was in college and I know the market can and does move into those statistically improbable areas.
Too bad market fundamentalists are just learning that or still have not learned that lesson. Everything that has happened in history will happen again.
Of course more regulation will reduce commodity prices; commods are pro-cyclical, and by increasing regulations you reduce economic growth.
Like the economy, politicians act in cyclicality. After WWII, semi-planned economies and governmental owned industries where the norm, regulation was high for business; this obviously didn’t work so well. In the 80’s de-regulation kicked-in (influences from Friedman to Reagan & Thatcher). This started the process of globalization and world liberalization which we live in. This worked well until mid 2008. Today, the pendulum is swinging back towards more regulation, the question is, how far will it go? What they want to do is harm the “speculators” but not the people using the commodity markets for their business. Do you guys think that regulating the markets by obliging everybody to take physical delivery would cool down the “speculators” ?
BTW, I highly recommend this documentary: Commanding Heights - The Battle for the World Economy, it explains the changes in economic policies from protectionism and regulation towards free markets.
mid 2008?
G HW Bush, Slick Dick Clinton, G W Bush added miles of rules to the regulatory regime. B H Obama has continued this madness.
The free market has been choked for decades.
Commodity prices are spiking because of the top US export: inflation.
Sarkozy wants to regulate the commodities market? Constrained markets exhibit MORE volatility. See: Onions (no futures trading, massive volatility)
Thank you for reminding me of what I wanted to say before becoming smitten by miss Bruni
His wife is tight. I'd tap that ass all night.
If it weren't for politicians fucking with economic principles to counter some other politicians fucked up economic blunder, we wouldn't have fucked up economies...
What first needs to happen is public awareness of just how bad inflation is. That means incorporating food and energy prices into the general inflation index, which is inaccurate and doesn't give a full picture of price increases. Not including the two most important things in everyone's budget is just ridiculous. I know they have their reasons for doing it--and of course, they're all stupid.
"Mr. Sarkozy, the European agricultural programs have done more to harm the emerging market farmers than any damage arising out of the commodity markets."
Touche
Government regulation makes everything better.
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