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Monday, September 27, 2010

Banksters Inflate Speculative Food Bubble, U.N. Offers Global Governance Solution

Banksters Inflate Speculative Food Bubble, U.N. Offers Global Governance Solution



Eric Blair
Never let a good crisis go to waste. The international bankers are taking advantage of the “food crisis” by driving up food prices in what is shaping up to be a classic case of a manufactured bubble. It is also looking like a clear model of Problem-Reaction-Solution methodology. Create the food inflation problem (of course profiting all the way up), force an enraged reaction among the public, and take more sovereignty away with the solution of global food regulation.
Take a look at the commodity price charts for wheat and corn. Pay particularly close attention to what has happened since July 1st:

These charts look like a technical trader’s dream, almost as if a computer program was set to incrementally increase the prices as to not make too many headlines on the way up. The recent market speculation has now driven food commodity prices for corn and soybean to their 2-year highs. An emergency meeting Friday by the U.N.’s Food and Agriculture Organization in Rome to address the urgent shortages and sudden surge in prices had this to say:
In the past few weeks, global cereal markets experienced a sudden surge in international wheat prices on concerns over wheat shortages prompted by the drought in the Russian Federation. These unexpected events raise important questions not only about the stability of markets but, even more importantly, about the accuracy of production forecasts and ultimately the overall supply and demand prospects. However, with an increasing proportion of world grain supplies originating from the Black Sea region, an area known for large variations in yields, unexpected production shortfalls are likely to emerge more as a common feature rather than an exception in the years to come.
The Guardian reported on the meeting that, “Environmental disasters and speculative investors are to blame for volatile food commodities markets, says U.N.’s special adviser.” The article went on to quote from a research paper by the U.N.’s “special rapporteur” on food, Olivier De Schutter, which summarizes how speculation is inflating a food bubble:
‘[Beginning in ]2001, food commodities derivatives markets, and commodities indexes began to see an influx of non-traditional investors,; De Schutter writes. ‘The reason for this was because other markets dried up one by one: the dotcoms vanished at the end of 2001, the stock market soon after, and the US housing market in August 2007. As each bubble burst, these large institutional investors moved into other markets, each traditionally considered more stable than the last. Strong similarities can be seen between the price behaviour of food commodities and other refuge values, such as gold.’
He continues: ‘A significant contributory cause of the price spike [has been] speculation by institutional investors who did not have any expertise or interest in agricultural commodities, and who invested in commodities index funds or in order to hedge speculative bets.’
Certainly, the flurry of reports about the growing concerns over global food production, extreme weather, and a record-weak dollar have offered sufficient excuses for the speculation. While at the same time, the human ramifications of these events are immeasurably awful. Here’s just a few headlines from this week alone:
• Global food risk from China-Russia pincer
• USDA reduces grain-production estimates
• Australian prime wheat in demand, supply outlook tight
• Canadian farmers hit by rain face latest foe — frost
• Brazil Crops Shrivel as Amazon Dries Up to Lowest in 47 Years
• Gold Climbs to $1,300 on Dollar Concern; Silver at 30-Year High
These are very real concerns for feeding the human population. And indeed, they are urgent matters to be solved. However, it seems too convenient to see the banksters profit, the public suffering turn to outrage, and the bank-owned government agencies to scramble for a “solution.” Haven’t we seen this Three-card Monte game enough by now? It’s a scam.

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