No New Taxes!!!--Well?

Can the Genie be put back in the bottle? This is the suggestion of the Indian Petroleum Secretary, or so Nymex executives claim. Well, maybe! One can eliminate the Speculators from the markets to a great degree, and in a manner which the marginal traders will understand instantly. It would also help most Governments in the World, who have been suffering a real degrade in financial solvency.

A simple tax on traded Commodities of 2% destroys all Speculation models, demanding an excessive Margin rise to gain a Profit in Speculative trading. Regulation or limitation measures in the Markets will cause more damage than benefit to the markets, but a simple, straightforward tax might cancel the impact of the Speculators. Commodity Buyers remain relatively unaffected by such a Tax; it being a simple increase in Commodity Price–treated like a Production Cost charge. Sellers find an easily understood necessary Price floor, while Markets face only an induced Trading Cost in their Commission brokerage fee. Governments discover a real source of Tax revenues which structurally aids their balance sheet. Margin Traders, on the other hand, have to functionally double their Profits ratio.

Now is the real timeframe to introduce such a Tax as well, as the current Administration is going to Sunset; George W. Bush cannot run again, and Campaign promises are best noted for being violated. The rest of the World will gratefully follow the United States, due to the real share of the financial markets enjoyed by this Country. Congressional members can blame the current Presidency for the new Taxation, and George W. can finally achieve his economic legacy. The real gain will come in the form of Tax revenues of major note, a process where Tax magnitudes rise as Commodity prices rise, and will reduce Commodity prices as Speculators realize model Trading will require much more Market swing than can be generated. The real trouble will be down-the-road difficulty with convincing greedy legislators to leave the financial markets alone. Application to all the markets would reintroduce Speculation to the Commodities markets again, and induce the much greater market swings found necessary by the Speculators. lgl