With oil prices fast approaching USD130 a barrel and a global food crisis looming, the US Senate Committee on Homeland Security and Governmental Affairs is scrutinising the role of financial speculators in the commodities markets. This week senators have been listening to testimony on how speculative investment by hedge fund managers and others may be contributing to food and energy price inflation. Hedge fund manager Michael Masters, of Atlanta-based Masters Capital Management, argues that commodities prices are being driven up by institutional investors, including pension funds, sovereign wealth funds and university endowments, which are investing in commodity futures based on indices as a hedge against inflation. Once again, hedge funds have been dragged in as an explanation for why certain prices are behaving abnormally. The fact is that speculators have always existed in the commodities trade, and investment from hedge funds - speculative or otherwise - is nothing new.   more »