Posts Tagged ‘Speculation’
The New Politics of Food Scarcity
Veteran world watcher Lester Brown sounds dire warning of spreading political unrest, conflicts, and deepening division between rich and poor as food prices soar and supply falls further and further behind rising demand, but does not point to obvious solution Dr. Mae-Wan Ho
June 14, 2011 The Institute of Science in Society
Soaring food prices and political unrest
Soaring food prices were a major trigger for the riots that has destabilized North Africa and the Middle East beginning December 2010 in Tunisia. Political unrest has since engulfed Algeria, Egypt, Jordon, Libya, Syria, Yemen, and spread to Burkina Faso, Niger, Nigeria, Cameroon, Uganda, and beyond [1-4]. Latin America is said to be at risk [5], and even Britain, if food prices continue to rise [6]. The UN Food Price Index has been hovering above 231 points since the start of 2011, and hit its all-time high of 238 points in February. The May 2011 average was 232 points, 37 percent higher than a year ago [7].
Richard Ferguson, global head of agriculture at Renaissance Capital, an investment bank specializing in emerging markets, told The Guardian newspaper in the UK [1] that the problems were likely to spread. “Food prices are absolutely core to a lot of these disturbances. If you are 25 years old, with no access to education, no income and live in a politically repressed environment, you are going to be pretty angry when the price of food goes up the way it is.” It acted “as a catalyst” for political unrest, when added to other ills such as a lack of democracy.
“Scarcity is the new norm”
Food has quickly become the hidden driver of world politics [8], says Lester Brown, venerated veteran world-watcher, who also predicts that crises like these are going to become increasingly common. “Scarcity is the new norm.”
Historically, price spikes tended to be almost exclusively due to bad weather such as monsoon failure, drought, heat wave, etc., but today, they are driven by trends of both increasing demand and decreasing ability to supply. With a rapidly expanding global population demanding to be fed, crop-withering temperatures and exhausted aquifers are making it difficult to increase production. Moreover, the world is losing its ability to soften the blow of shortages. USA, the world’s largest grain producer, was able to rescue shortages with its grain surpluses in the past, or bring idle croplands into cultivation. “We can’t do that anymore; the safety cushion is gone.”
That’s why “the food crisis of 2011 is for real”, Brown warns, and why it may bring yet more bread riots and political revolutions. Tunisia, Egypt, Libya, may not be the end, but the beginning.
Brown does not mention the huge speculation on agricultural commodities in the world financial markets that not only drives up prices but increases volatility, making it much more difficult for farmers and consumers to cope (see [9] Financing World Hunger, SiS 46). Olivier de Shutter, the United Nations special rapporteur on the right to food, has referred to the 2007-2008 crisis as a “price-crisis” not a “food-crisis”, precipitated by speculation and not linked to insufficient food being produced, at least not yet, as Brown elaborates.
Read the rest of this entry »
Truth Decay: reality vs. perception management
First, define it. (Tough one, huh?) In an era of plausible deniability, drone over-kill and high-tech surveillance it is perfectly reasonable to suspect both events and motives. I expected this article might be another to put tin foil hats on the usual suspects but it has a little different approach, and it’s worth reading.
What was ‘reality’ when people were encouraged to “Remember the Maine!”? We still don’t know for sure. But with the sophisticated and highly paid perception management industry busy twisting facts into talking points, we need to keep our critical thinking caps on 24/7. It’s too easy to obscure a nasty black-op with a “conspiracy theory” label.
-cwr
***
By Greg Guma May 25, 2011 AlterNet 
Truth Decay: Conspiracy Theories and Hoaxes Are Blurring Reality
How about some accountability for the false prophets, gross opportunists, and irresponsible rumor-mongers who threaten society with truth decay?
After his End Times prediction failed last week millionaire radio prophet Harold Camping eventually came up with an excuse. During his show “Open Forum” in Oakland on May 23, he explained that the world will still end in October. It’s a process and we’re just getting started. That’s a relief. At first I thought millions of people had just wasted days of time and energy fussing over some hairbrained idea.
There are so many theories out there. Obama is a secret Muslim – millions of people believe that, secular humanists want to repress religion, and liberals are plotting to confiscate people’s guns and push a “gay agenda.” At the opposite end of the political spectrum, there’s the assertion that 9/11 was an inside job and all that this entails. No offense meant. I’ve been called a “conspiracy nut” myself, specifically for saying that we should know more about the attack on the Twin Towers. Still, a modern-day Reichstag fire at multiple locations does qualify as a radical conclusion.
I usually resist the urge to challenge the controversial theories of fellow travelers, at least in mixed company. The other night, for example, during a discussion about Al-Qaeda after Osama, a speaker casually asserted that President Roosevelt knew about the attack on Pearl Harbor in advance and let it happen. No one said a word. I considered questioning the notion but let it pass.
Anything’s possible, right? Why be rude? But some theories and predictions are too important. They are widely accepted as indisputable and part of an overall world view, usually linked with an anti-establishment ideology. They have practical consequences for social action, can spark deep divisions, and influence how people see and treat others. In some groups, if you question the conclusions of a prevailing theory you’re either a dupe or a collaborator.
Deep skepticism is often at the root, a good thing in general. After all, so much of what we once believed has turned out to be a lie, or at least a very selective version of reality. But still, shouldn’t there be standards? Also, why do some theories get all the attention while others, perhaps more credible ones, get buried? And can’t we at least call people to account when their claims repeatedly lead down false trails?
Glencore: Profiteering From Hunger and Chaos
Updated: new links below
By Chris Arsenault *
DOHA, May 10, 2011 (IPS/Al Jazeera) – The rapid rise in prices for food, fuel and commodities has been disastrous for the world’s poor, including Indonesian market vendor Lia Romi. But it’s a bonanza for multinational trading firms such as Glencore.
While Romi has trouble feeding her family, Glencore – the world’s largest diversified commodities trader – is planning a $11 billion dollar share sale, likely the largest market debut ever seen on the London Stock Exchange.
“The price for our daily food has at least doubled in the past two years,” Lia Romi told Al Jazeera through a translator. “Food costs 100 per cent of my family’s daily income [of about $3]. I have nothing saved and I owe [money] from my [market stall] business.”
While Romi, and millions like her, worry about feeding their families, the initial public offering from the commodity speculating giant will create at least four billionaires, dozens worth more than 100 million dollars and several hundred old fashioned millionaires. Chief Executive Ivan Glasenberg is set to make more than nine billion from the share sale. And speculating on food prices is an important part of his wealth.
Controlling prices
Valued at about 60 billion dollars, Glencore controls 50 percent of the global copper market, 60 per cent of zinc, 38 per cent in alumina, 28 per cent of thermal coal, 45 per cent of lead and almost 10 per cent of the world’s wheat – according to information the firm disclosed prior to its share sale. It also controls about one quarter of the world market in barley, sunflower and rape seed.
“They are possibly one of very few mining companies that are price makers, rather than price takers,” said Chris Hinde, editorial director of Mining Journal magazine. “They are the stockbrokers of the commodities business [operating] in a fairly secretive world. They are effectively setting the price for some very important commodities,” he told Al Jazeera.
The firm employs about 57,000 people, generated a turnover of 145 billion dollars in the past year and has assets worth more than 79 billion. Glencore’s media department refused interview requests from Al Jazeera.
Based in Baar, Switzerland, where regulation is minimal, the company’s sprawling interests span Bolivian tin mines, Angolan oil, zinc producers in Kazakhstan, Zambian copper mines and Russian wheat operations.
“Glencore’s vertical integration really is unprecedented,” said Devlin Kuyek, a researcher with GRAIN, a non-profit international organisation working on food security.
“Glencore owns almost 300,000 hectares of farm land and it is one of the largest farm operators in the world. They are engaging in speculation on the grain trade and have immense market power,” he told Al Jazeera.
Global food prices have climbed recently, returning close to their 2008 peak, when bread riots swept parts of the Middle East, Africa and the Caribbean.
“A disturbing amount of price increases, I fear, is being driven by speculative activity,” Marcus Miller, a professor of international economics at the University of Warwick, told Al Jazeera. “Bets [on future price rises or declines] can become self-fulfilling if you are big enough to affect the market.”
The Egyptian Uprising Is a Direct Response to Ruthless Global Capitalism
The revolution in Egypt is as much a rebellion against the painful deterioration of economic conditions as it is about opposing a dictator, though they are linked. That’s why President Hosni Mubarak’s announcement that he intends to stick around until September was met with an outpouring of rage.
When people are facing a dim future, in a country hijacked by a corrupt regime that destabilized its economy through what the CIA termed, “aggressively pursuing economic reforms to attract foreign investment” (in other words, the privatization and sale of its country’s financial system to international sharks), waiting doesn’t cut it.
Mohamed Bouazizi, the 26-year-old Tunisian who catalyzed this revolution, didn’t set himself on fire in protest of his inability to vote, but because of anguish over his job status in a country with 15.7 percent unemployment. The six other men in Algeria, Egypt and Mauritania who followed suit were also unemployed.
Tunisia’s dismal economic environment was a direct result of its increasingly “liberal” policy toward foreign speculators. Of the five countries covered by the World Bank’s, Investment Across Sectors Indicator, Tunisia had the fewest limits on foreign investment. It had opened all areas of its economy to foreign equity ownership, except the electricity sector.
Egypt adopted a similar come-and-get-it policy, on steroids. From 2004 to 2008, as the world economic crisis was being stoked by the U.S. banking system and its rapacious toxic asset machine, Mubarak’s regime was participating in a different way. Mubarak wasn’t pushing subprime loans onto Egyptians; instead, he was embarking on an economic strategy that entailed selling large pieces of Egypt’s banks to the highest international bidder.
The result was a veritable grab-fest of foreign bank takeovers in the heart of Cairo. The raid began with Greek bank, Piraeus, taking a 70 percent stake in the Egyptian Commercial Bank in 2005, and included the sale of Bank of Alexandria, one of the four largest state-run banks, to the Italian bank, Gruppo Sanpaolo IMI in 2006. For the next two years, “hot” money poured into Egypt, as international banks muscled into Egypt and its financial system, before the intensity leveled off in 2008.
Food prices can’t just be swept under the table
“The reality is that the same speculators that caused the global economic meltdown through their illustrious trade in sub-prime mortgages, are betting on our food system now too.”
Madeleine Bunting 13 January 2011 guardian.co.uk
Soaring food prices threaten more unrest and must prompt a global rethink about agriculture and investment
The year started grimly with news of the food prices rising to the highest point since 1990, according to the Food and Agriculture Organisation. They have surpassed the 2008 prices that led to widespread rioting and unrest across the developing world; immediately, bloggers such as Duncan Green and Alex Evans were asking why there had been no riots. And just as they were posting, riots flared up in Algeria, with two killed and hundreds injured in the protests against soaring food prices. Across the border in Tunisia 14 were killed in clashes with the police. As the unrest spreads across northern Africa, Egypt is nervously trying to put measures in place to prevent any comparable violence, with extra supplies of meat being flown in from Kenya. An occupational hazard of blogging; no sooner have you posted, than somewhere in the world you have been outstripped by events.
Financing World Hunger: How the financial markets create hunger and make huge profits
“Food is produced by farmers everywhere in the world; but it is mostly bought and sold as commodities by ‘middlemen’, now mostly big corporations that trade globally, not just in a commodities market, but also in an elaborate financial derivatives market that pushes food prices up and creates price volatility.”
The Institute of Science in Society
Dr. Mae-Wan Ho and Prof. Peter Saunders
World food crisis rerun?
Food prices have been rising since 2003. By mid-2008, the food commodity price index peaked at 230 percent of its 2002 value, with most of the increase due to the grain prices. Corn and wheat both reached 350 percent and rice 530 percent respectively of their 2002 values [1]. The United Nations declared 2008 the year of the global food crisis even before prices peaked [2], and an estimated 150 million were added to the world’s hungry that year [3]. Although food prices have fallen from their peak, they remained well above 2002 levels;. By the end of 2009, more than a billion people are critically hungry, with 24 000 dying of hunger each day, over half of them children [3, 4]. The UN Food Programme faces a budget shortfall of US$4.1 billion.
The UN’s special rapporteur on the right to food Olivier de Schutter blames [5] “inaction to halt speculation on agricultural commodities and continued biofuels policies”, and warns of a rerun of the 2008 food price crisis in 2010 or 2011. What happened in 2007-8 was a “price crisis, not a food crisis”, he says, precipitated by speculation in the financial market that was not linked to insufficient food being produced.
Now we know the truth. The financial meltdown wasn’t a mistake – it was a con
Hiding behind the complexities of our financial system, banks and other institutions are being accused of fraud and deception, with Goldman Sachs just the latest in the spotlight. This has become the most pressing election issue of all
Will Hutton 18 April 2010 The Observer
The global financial crisis, it is now clear, was caused not just by the bankers’ colossal mismanagement. No, it was due also to the new financial complexity offering up the opportunity for widespread, systemic fraud. Friday’s announcement that the world’s most famous investment bank, Goldman Sachs, is to face civil charges for fraud brought by the American regulator is but the latest of a series of investigations that have been launched, arrests made and charges made against financial institutions around the world. Big Finance in the 21st century turns out to have been Big Fraud. Yet Britain, centre of the world financial system, has not yet levelled charges against any bank; all that we’ve seen is the allegation of a high-level insider dealing ring which, embarrassingly, involves a banker advising the government. We have to live with the fiction that our banks and bankers are whiter than white, and any attempt to investigate them and their institutions will lead to a mass exodus to the mountains of Switzerland. The politicians of the Labour and Tory party alike are Bambis amid the wolves.
Wall Street Will Be Back for More
Jan 10, 2010 TruthDig
By Chris Hedges
Corporations, which control the levers of power in government and finance, promote and empower the psychologically maimed. Those who lack the capacity for empathy and who embrace the goals of the corporation—personal power and wealth—as the highest good succeed. Those who possess moral autonomy and individuality do not. And these corporate heads, isolated from the mass of Americans by insular corporate structures and vast personal fortunes, are no more attuned to the misery, rage and pain they cause than were the courtiers and perfumed fops who populated Versailles on the eve of the French Revolution. They play their games of high finance as if the rest of us do not exist. And it is a game that will kill us.
