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

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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.

On July 1st,
I wrote an article titled USDA
Reports Food Shortages: Wall Street "Caught Off Guard"
by Severity
, quoting a USDA report "Commodity professionals
were caught off guard Wednesday by a U.S. Department of Agriculture
report showing 1 million fewer acres of corn planted this year than
earlier projected, and almost 300 million fewer bushels of corn
in storage." Well, the banksters seem to have made up some
of their losses since being "caught off guard" by the
severity of the global food crisis.

Take a look
at the commodity price charts for wheat and corn. Pay particularly
close attention to what has happened since July 1st:


Wheat Prices
– Source: Commodity
Charts


Corn Prices – Source: Commodity
Charts

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."

Read
the rest of the article

September
29, 2010

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