With a surplus of aluminum on world markets, a planned exchange-traded fund promises to soak up a portion of supply and lend a prop to prices — much as other commodity funds are credited with doing.
Details of the ETF are being finalized by Swiss commodity supplier Glencore International SA and Credit Suisse Group. If the product gets the regulatory go-ahead, the merchant, Glencore, will need to buy aluminum as physical backing for the fund.
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- Firms Take a Shine to Aluminum ETF
- Andrea Hotter
- The Wall Street Journal
- September 28, 2009
When Mike Masters and I were meeting with people in Washington D.C. last year, following his Senate testimony on the role Index Speculators were playing in pumping up food and energy prices, we spent a big part of our time explaining how the futures markets drive the spot markets. Many people asked us if we had evidence of physical hoarding by investors because it was easier for them to see how investors buying actual physical commodities would drive the price up.
If this ETF gets approved it represents a very damaging trend for world commodity prices. Why would any regulatory agency sanction hoarding? After we allow Wall Street to hoard base metals then pretty soon they will move on to hoarding energy and finally hoarding food. ETFs on physical commodities allow investors to directly corner and squeeze the markets just like the Hunt Brothers did. The article itself acknowledges that this will prop up prices!
Gold has been traditonally been a store of value and an alternative currency for millenia. But once you start moving into the essentials of life like food and energy then you are in very dangerous territory.
In the words of Mike Masters “at what point does asset allocation trump human rights?”
