SPECULATION IN COMMODITIES: KEYNES’ “PRACTICAL ACQUAINTANCE” WITH FUTURES MARKETS

Abstract

In this paper we address the subject of Keynes as a speculator. We look first at the primary sources of information, which are in the form of unpublished letters and broker’s statements. Secondly, we look at the theory Keynes sparingly presented in his writings, but which nevertheless is grounded on his first-hand knowledge of speculative behavior. Thirdly, we examine the focus on speculation in commodities, which had great weight in his portfolio, and have chosen a particular commodity -wheat- for our investigation. In particular, we examine some of Keynes’s dealings in wheat futures with the aim of shedding light on the underlying investment strategy.