he most immediate change that would help solve the economic "meltdown" in the USA is the regulation of the futures, options and derivatives market. Specifically, the commodities futures trading must be controlled to reduce volatility in the price structure of vial commodities.
What is the social justification of futures (options) trading in oil, gasoline, wheat, corn and other vital commodities? All we are doing is creating a cheap financial instrument used by financial speculators for their own profit. Options traders are in the market only to make money, they have no social conscience. . What an options trader can do with an small investment of $10,000.- for example, can control an oil futures contract of over $100,000,000.- and cause the price of oil to increase in a single trade, allowing the oil nexus (spot price) to multiply itself cybernetically over the entire world economy.
We are giving a small group of speculators power over vital commodities pricing that is beyond the power of the US government, the Banking System, and the People themselves. This is an instrument of financial injustice that is destroying our economy. Must we all must pay the extra dollar a gallon of gasoline in order to satisfy the greed and lust for profit of these financial players?
The futures options market in vital commodities (TBD) must be controlled by simply increasing the initial margin for such trades to at least 90% of the nominal value of the commodity contract, under mandate of the SEC and executive order of the President of the United States. In addition, futures contracts should only be available to buyers of the commodity, not to i'ts producers, and they must be completed at their expiration at their nominal amount at the strike price. This would insure that all futures contracts are in reality just that, a contract to purchase a commodity at a future date, at a set price determined by the contract. The complement of the margin would in effect become a derivative that could bve modeled to arrive at the actual price that will be paid upon contract expiration.
This is a time in herstory where the struggle between the power of money and the vital needs of the People is unfolding. It is time to leave behind the Republican's elitist financial injustice to move toward social - democratic financial justice.
Atlanta, GA
Mar 27, 2008
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