“Nothing but price speculation can explain wheat prices jumping 70 percent from June to December last year when global wheat stocks were stable, experts say.”
-Ips News Net 4 February 2011
“Remove far from me falsehood and lying:
give me neither poverty nor riches;
feed me with the food that I need.”
Al Jeezeera says the Arab World is on fire. John McCain calls it a virus. It’s been referred to as a prairie fire and Glenn Beck wants us to believe it is a plot of the Uber Alles left and Code Pink linking up with the Islamic Brotherhood. There are many facets to the growing turmoil in Egypt and much of Africa and the Middle East; some political, some social, and some religious. But beneath it all is the spark that lit that fire: food.
Wall Street investment firms, banks and now even pension funds have poured billions of dollars into buying and selling commodities to drive up the price, reap huge profits, and then sell and leave the mess in the hands of common ordinary people around the globe. This is the fruit of deregulation of the market place. The U.S. Commodity Futures Modernization Act of 2000 freed up banks and investment houses and just about anybody to sell food as derivatives and to create still another speculative bubble on Wall Street. Essentially, the rich have found another way to quickly make money at the expense of everyone else. This is literally taking food out of the mouths of people by driving up the price to the point where they cannot buy it.
“There is no food shortage in the world. Food is simply priced out of the reach of he world’s poorest people,” said Robert Fox of Oxfam Canada. One billion people are hungry in the world tonight who do not have to be. “Hunger is not a food production problem. It is an income problem,” Fox said. The UN Food and Agriculture Organization (FAO) says that there has been no change in the global food supply or the demand for food yet between June to December 2000 the average cost of buying food has increased 32 percent globally.
The deregulation of commodities has created a whole new play zone that over the past decade the markets are taking increasing advantage of. The Home buying bubble is gone. The dot-com bubble has long burst. Now it is food. The toppling of the Tunisian government began as protests over the price of bread. Those with history in mind know that the political temperature of Paris and the momentum for the French Revolution and later revolts could always be pegged to the price of bread in town. There have been bread riots in Tanzania, in Zimbabwe, and Jordan, and Yemen. The demands are political: for democracy. But having a more responsive government to the common people is the key for hundreds of millions on this planet to get action on the price of food. The world’s poor pay far more of their total income for food than do developed nations that are able to sheild themselves from the worst of the price inflation as investors happily speculate. Speculation means risk. These investments do not produce a thing. They are not the traditional buying and selling and hedging that farmers and agricultural commodities corporations traditionally have done to protect them from falling prices that might ruin them.
Governments truly concerned about stability and order in the world have shockingly been asleep at the wheel on this issue. Not only is the speculation in commodities starving a billion human beings on this planet unnecessarily, but it represents a real national security threat to the United States that both Republicans and Democrats should move to meet via regulation of this market. This is the price of de-regulation. The bloodied heads, the chaos, the crying of a mother who cannot feed her child. Is it worth playing with food to simply enrich the already wealthy? On every count this is bad policy and immoral in the extreme. It is not necessary for the food industry to prosper at all. It is excess and irresponsibility and most of all still another example of the pursuit of naked greed.
This has happened before. In 2007-2008 another food bubble rose to further impoverish the already impoverished and starve them out via speculative price hikes as the financial markets used derivatives hedges index funds and swaps to grossly inflate the price of food. Poor weather and excessive demand did not do this, nor has this been the case in 2010 and into this year. Banks and investment firms and pension funds and rich speculators used seven trillion dollars to manipulate food prices for short-term easy profits and people suffered.
It is happening again. Tunisia, Egypt, Jordan, Yemen, Tanzania and Zimbabwe and Ethiopia and Somalia and the Sudan. Think of any nation where millions upon millions use most of their income simply to buy food to survive and you have laboratories for the creation of revolutions and unrest; not to mention people going hungry.
The Egyptian Revolution has many causes and will produce a myriad of effects. But the spark that lit those Molotov cocktails and led to millions in the streets was hatched in Wall Street commodities trading that until 2000 was not permitted. Playing with people’s lives like this is the height of evil. This is greed on an international stage that directly harms others on a massive scale almost too large to take in. Look for the real reason behind the turmoil in Egypt and elsewhere: manipulation of world food prices and a billion hungry, scared, angry, and victimized representatives of humanity suffering to appeal to the lust for money of others too insensitive to care what they do or why they do it or what effects they produce. This is shameful. It is the greatest injustice in our world today and the media hides it from us. Why? Some questions to ponder and to act upon in our common Struggles for Justice.