$50Bn of Commodity Investment at Risk? [brucekrasting]
September 20, 2012 Leave a comment
A tax lawyer I know sent me a link to an article about a tax ruling. I’m thinking “Boring”, who cares about that? Then I read the article. A few lines jumped out:
Commodity prices could come under severe pressure if the U.S. Internal Revenue Service (IRS) decides to revoke previous rulings.
Without the tax exemption, mutual funds would have to restructure orliquidate their holdings.
The resulting liquidation would put tremendous pressure on commodity prices and reverse much of the build up of speculative money in commodity markets over the past decade.
An enormous industry has built up on a very thin legal foundation, and now it’s starting to sway dangerously in the wind.
I’m no tax lawyer, so I recommend that readers draw their own conclusions about this screwy story.Link.