Ban Goldman Sachs From Playing In Commodity Markets

Federal Reserve Review
On Friday Reuters reported that the Federal Reserve is going to review the 2003 decision that allowed regulated banks to trade in physical commodity markets: “The one-sentence statement suggests the Fed is taking a much deeper, wide-ranging look at how banks operate in commodity markets than previously believed, amid intensifying scrutiny of everything from electricity trading to metals warehouses.” Reuters goes on to say, “While the Fed has been debating for years whether to allow banks including Morgan Stanley (MS.N) and JPMorgan (JPM.N) to continue owning assets like oil storage tanks or power plants, Friday's surprise statement suggests it is also reconsidering whether all bank holding firms should be able to trade raw materials such as gasoline tankers and coffee beans.” 
Big Banks & Unintended Consequences of Fed Policy
The Fed is finally getting that the Big Banks are canceling out any intended good that may accrue to wealth creation by pushing up stock prices, if at the same time these same financial institutions also push up commodities like oil, gasoline, copper, heating oil, wheat, corn, and soybeans with the same cheap QE stimulus money.
The fed is trying to weed out some of the unintended consequences of their QE stimulus program. Because on one hand they are trying to stimulate the “Wealth Effect” with higher stock prices, but these bankers have so much cheap capital available to them, and with the fed mandate to boost asset prices, they cannot help but juice up commodities at the same time. 

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