When food prices rise, some blame investors. Last year, the German news magazine Der Spiegel published an in-depth article, called Speculating with Lives, looking at what’s driving up food prices. The authors argue that while some of the factors we hear a lot about, such as global warming, biofuels and population growth, are small contributors to rising food prices, they aren’t the main culprit. Instead, the article points a finger at investors who have increasingly fled the financial markets and started trading in commodities such as silver, gold and, yes, food. New IATP Report Shows Excessive Speculation Hurts Farmers and Increases Hunger By Kim Kido – A recent report published by the Institute for Agriculture and Trade Policy (IATP) describes how and why speculative trading has caused agricultural commodity prices to fluctuate wildly, irrespective of actual supply and demand. The report shows how such price fluctuations negatively impact farmers and consumers, and supports regulations that would stop this from happening. "Orthodox agricultural economists denied that the commodity price bubble was due to anything but fundamentals, and both Wall Street and LaSalle Street gleefully cited their work.
David Frenk, former financial analyst and now executive director at Better Markets, Inc., eviscerated such denialist work, published by the Organization for Economic Co-operation and development just before they voted on what would become the Dodd-Frank Wall Street Reform and Consumer Protection Act. Frenk’s work is reprinted here, as is an excerpt from the testimony of Professor Michael Greenberger to the Commodity Futures Trading Commission (CFTC). Greenberger, a former CFTC commissioner, explains important regulatory tools that the CFTC can use to prevent the excessive speculation that induces price hikes and volatility.
Bella Vista Resort,
(Adapted from http://hijausawah.blogspot.com)