Quote:
Originally Posted by GWC...
Just to be clear on wordage...
You are stating that those who speculate in commodities, in an effort to hedge inflation, are investors, not traders.
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Exactly. Most commodity traders do not have a long term bias in one direction or another; they will take an equal number of short and long positions over time, and most positions are held on a short term basis. An investor or speculator, on the other hand, only puts his money in one direction- long, and usually on a long term basis. So you're right, as an instrument to hedge inflation, investors will buy commodity index funs. That huge influx of extra capital flowing into the market is driving all commodity prices higher, not just oil.