Jamesian Philosophy Refreshed

I received an annual report from a money market fund recently. It includes a Q-and-A with two portfolio managers: Joanne M. Driscoll and Jonathan M. Topper. I'll pass along a bit of their wisdom here. The first question is, "Please describe the market environment for the 12-month reporting period ended September 30, 2015?" They respond in part thus: "The steep decline in commodity prices was especially noteworthy as low oil prices have eased inflationary pressures in the U.S. economy -- keeping inflation well below the Fed's 2% target for price stability. ... the central bank left its benchmark rate unchanged at its main policy making committee meeting in July, but added that it expected to begin raising short-term rates before the end of 2015. At their September meeting, Fed policymakers delayed raising the key short-term interest rate, citing weaker macroeconomic conditions abroad and the heightened market volatility brought on by the People's Ban...

Thoughts in the manner of Hazlitt: Any commodity market is of necessity about hedging from more than one side, as well as about speculating. An industry that consumes a lot of energy (say, an electric utility) wants to hedge against the price of its supplies spiking up, just as the suppliers, in Texas or Saudi Arabia, want to hedge against the possibility of a sharp downward move. So the markets can serve both hedges. No: there is no reason why this should artificially drive prices up. Anymore than it artificially forces them down.   The risks of fluctuating crude oil prices will be borne by somebody. The risk exists, nobody other than an advocate of central planning believes that it can be ordered to go away. Somebody will bear it. Utility company, oil producer, speculators, or some combination. Under normal conditions, then, by letting speculators come in to play a role between the two hedging operational parties I have mentioned, commodity markets perfor...