A coalition of consumer and public interest groups last week called on Congress to ban commodity index funds and exchange-traded commodity funds because they say these vehicles have helped fuel higher energy prices, according to a Reuters report.
The target of the group's collective ire was their perception that Wall Street speculation has artificially jacked up oil and gasoline prices. Their complaints are part of the ongoing debate about whether the $300 billion that institutional investors have put into the commodity markets during the past decade has boosted volatility and created price spikes.
"The answer to the heart breaking and economy breaking high gas prices is to stop by Act of Congress the roughly half trillion dollars of gambling on the upward direction of those prices by Wall Street speculators disguising those bets through the use of commodity index swaps and exchange traded commodity funds," Michael Greenberger, a law professor at the University of Maryland and a former official at the Commodity Futures Trading Commission, told House Democratic Leader Nancy Pelosi and other top House Democrats at a policy hearing on Wednesday.
Greenberger was joined by officials from Americans for Financial Reform, the Consumer Federation of America and Wallace Turbeville, senior fellow at Demos and a former Goldman Sachs executive.