What Dodd-Frank has Cost ME

What a terrible piece of legislation. It won't do anything to stop the crony capitalists who SHOULD have been taught a lesson by being allowed to go bankrupt. Instead, the government propped them up with taxpayer money, then passed this horrid piece of legislation to "prevent" a future occurance. Right. If you want to offset corporate greed, give them something to FEAR - that is, a loss of everything. All Dodd-Frank does is to make it MORE important for large corporations to cozy up to your elected officials and buy influence so that they can continue side-stepping the regulations.

Anyway, nearly 3 years ago, I thought it would be smart to play the Forex markets, which included spot silver and spot gold. I did very well for a few months, then got in deep on a silver position. Not having done sufficient research into fundamentals, I got scared and sold off my leveraged 300 ounces of silver at about $14.80 an ounce (having bought the 300 ounces at about $16.50 an ounce) for a loss of around $500. I closed my trading account and resolved not to trade Forex anymore until I had money I could afford to lose. Of course, silver is now trading at about $33 an ounce. Whoops.


In December, having done much more research into the fundamentals of silver and gold, and having $500 that I could afford to lose, I resolved to once again open a trading account on the first trading day in January. I planned to buy 10 ounces of gold at 50:1 margin - which would have cost me about $320 since gold was trading at right under $1,600 - and hold the position for at least the whole year. At most, I'd lose my $500 trading balance (since Forex.com does not allow you to lose more money than you have in your account) and at best, I could make $7,000 if gold hits the $2,300 level that many economists predict by year end. Only problem was, when I went to open my account, I found I could no longer buy gold at 50:1 margin. I could still buy currencies at 100:1 margin, but gold had to be bought outright at 1:1. Since I still don't have a good understanding of currency fundamentals, and I didn't have $1,600 to buy an ounce of spot gold, I didn't open the account. So WHY couldn't I trade gold on margin anymore? A quick Google search turned up the answer: Dodd-Frank outlawed trading precious metals on margin beginning in July of 2011.

So, with gold trading above $1720 today, Messrs. Dodd and Frank, together with the rest of congress and the president, have, to date, cheated me out of twelve hundred dollars. Thanks a lot.