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Speculation

“HOOVER PUTS BAN ON COFFEE SPECULATION; Acts After Conference with Members of New York Coffeeand Sugar Exchange.”

All this hubbub about oil speculation is history repeating. The price of coffee in the early 1900s was the cause of popular discontent and Congressional hearings.

Now, as then, it’s all mostly political theater. Speculators bet on the price of a commodity, but rarely actually take ownership of physical product.

But politicians must find some boogeyman to point the finger at, because it’s political suicide to point it where they can’t create a “fix”.

Coffee prices only stabilized when the source countries’ governments did. Oil prices will stabilize when supply is able to keep pace with demand.