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<p>[QUOTE="Cloudsweeper99, post: 650502, member: 3011"]This isn't correct. If an oil exploration and production company decides to hedge a percentage of next year's production, they aren't gambling or speculating. They are hegding to lock in a cash flow so they can budget for next year. These companies are concerned with locking in a return on capital, not speculating on the price of oil. And they can demonstrate to the CFTC that they have every expectation of being able to meet delivery of their futures contract. Is it a guarantee? No, that isn't possible in this world. Is it evidence of legitimate commodity hedging? Yes, and that is what the discussion is about.</p><p><br /></p><p>It is very easy for the government to stop speculation with position limits. The legitimate hedgers will be exempt from the limits by demonstrating that their business has the normal expectation to produce more wheat, corn, soybeans, oil, hogs, silver, etc... than the futures contracts requires for delivery. This locks out the market manipulators who currently sell more contracts than could be delivered by any entity on the planet, particularly in silver.</p><p><br /></p><p>Interestingly, if someone [like the Hunt brothers] decided to purchase massive amounts of silver for future delivery, the regulators would jump all over them for being market manipulators. But if someone [like JP Morgan Chase] decided to sell massive amounts of silver that they don't actually own and promise future delivery, the regulators don't even blink. This is the issue. Leveling the playing field.[/QUOTE]</p><p><br /></p>
[QUOTE="Cloudsweeper99, post: 650502, member: 3011"]This isn't correct. If an oil exploration and production company decides to hedge a percentage of next year's production, they aren't gambling or speculating. They are hegding to lock in a cash flow so they can budget for next year. These companies are concerned with locking in a return on capital, not speculating on the price of oil. And they can demonstrate to the CFTC that they have every expectation of being able to meet delivery of their futures contract. Is it a guarantee? No, that isn't possible in this world. Is it evidence of legitimate commodity hedging? Yes, and that is what the discussion is about. It is very easy for the government to stop speculation with position limits. The legitimate hedgers will be exempt from the limits by demonstrating that their business has the normal expectation to produce more wheat, corn, soybeans, oil, hogs, silver, etc... than the futures contracts requires for delivery. This locks out the market manipulators who currently sell more contracts than could be delivered by any entity on the planet, particularly in silver. Interestingly, if someone [like the Hunt brothers] decided to purchase massive amounts of silver for future delivery, the regulators would jump all over them for being market manipulators. But if someone [like JP Morgan Chase] decided to sell massive amounts of silver that they don't actually own and promise future delivery, the regulators don't even blink. This is the issue. Leveling the playing field.[/QUOTE]
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