Tuesday, July 07, 2009

First steps back to barter..May be!

The major headline today in Nytimes was "U.S. Considers Curbs on Speculative Trading of Oil".

I felt very happy to look at it. For once oil & gas trading will be restricted mostly to the people actually use oil but not the financial institutions and non-energy based organizations which trade in oil like any other commodity.

Some of the trends of oil movement make no sense nowadays. There is no good news in the world economy, but still oil prices jumped to $70/bbl. Even even during the earlier so called "bull run" the movement of oil to $140 was way beyond the understanding of many experts.

But everyone agrees to the involvement of speculative trading in all the commodities.

US for once is thinking about some restrictions on the free market phenomenon by putting curbs on the involvement of these speculative traders who are there to just make money and let the others go for a toss.

I hope similar things should happen even for other commodities. I know of my colleagues who have nothing to do with commodities but trade in them as if they are another set of financial instruments. Why should someone have a look at food as a financial instrument? Doesn't everyone understand that there are certain things which money can't buy? Am I getting a bit emotional. Ok. Let us just stick to economics.

I guess finally more than business sense, social sense is prevailing in Obama's administration!!