Quote from Landis82:
That is until margins are raised and it becomes a "liquidation-only" type market like the COMEX did to the Hunt Brothers back in 1980. Throw in a few interest rate hikes by Volcker, and it was all over but the crying.
Remember, as of the end of Q1 of this year, $70 BILLION of pension fund assets were "invested" in the energy futures markets. Let me repeat: PENSION FUND ASSETS!
There are some people in Congress that have a BIG problem with that.
Govt. changed the rules once before.
They can surely do it again.
I take your point, but remember that sentiment on silver was wildly bullish back then, and all the signs of a bubble top were in place even before COMEX player their party-pooping hand. That isn't the case in oil just yet. If anything, the political risks are more bullish than bearish - a strike on Iran could send oil to $200 in a jiffy.
As for pension funds - $70 bill is nothing, that's one moderate-size pension fund nowadays. They had much more of that in tech in 2000. When pension funds have $1 trillion in commodities, then I might start getting worried.
Quite why Congressmen have a problem with that I don't know. Commodities are the only asset that has made money in the last year, any pension fund that invested in them has done *extremely well* for their retiree clients. Perhaps Congress would prefer old Americans to retire poor because they invested in Treasuries at a 4% yield? I guess that's the only way they can envisage continuing to fund the outrageous budget deficits they keep passing, especially once the dollar tanks even more and foreigners finally panic out of losing money on negative real-return bonds denominated in collapsing greenbacks. Way to go, government!
