The rule would set limits on traders accumulating position in commodities, including energy products and metals, like oil and gold.
If you thought that there is some chance that treasury yields will only rise slightly over the next few years, but also some risk of solvency problems and a panic flight from the dollar, what you might want to do is to take a long position in treasuries hedged with a long position in commodities.
Commodity ETFs — Whether you are bullish or bearish, its easier than ever for the individual investor to take a position in commodities with ETFs like streetTracks Gold Trust, iShares COMEX Gold Trust, and the United States Oil Fund.
All the banks are now taking huge futures positions in commodities.
The derivatives market has exploded in size since the 1990s as more companies and investors looked for ways to take positions in commodities, corporate defaults, mortgages and other assets without having to purchase actual goods.
The new rules, part of last year's financial-reform law in the US, will limit the positions that traders can take in commodity futures and swaps.
Meanwhile, its acquirer, the Atlanta-based IntercontinentalExchange, or ICE, has bolstered its position as "trading in commodities and derivatives has become much more lucrative than trading in the shares of companies," DealBook's Ben Protess and Nathaniel Popper write.
In Barclays Capital's 2012 outlook, analysts cite recent data indicating hedge fund positions in all commodities, including energy, have been pared back sharply since the middle of 2011.
They engage in what is variously called 'noise' or 'high frequency' trading, meaning they buy and sell futures contracts on a range of underlying assets, mostly bonds and equities, with the occasional position in currencies or commodities, and hold their positions for short periods of time, usually seconds or minutes.
The Jansen mine, which could cost a total of about $12 billion to build, according to Goldman Sachs, offers BHP a low-cost position in a strategic commodity.
A small group of businessmen seized public assets and acquired monopoly positions in strategic commodity markets such as iron and steel, cement and wood.
