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The real hunger games: How banks gamble on food prices – and the poor lose out

In the last decade, financiers have speculated billions of pounds in food, helping to make prices dearer and more volatile

Grace Livingstone
Sunday 01 April 2012

Speculation by large investment banks is driving up food prices for the world's poorest people, tipping millions into hunger and poverty. Investment in food commodities by banks and hedge funds has risen from $65bn to $126bn (£41bn to £79bn) in the past five years, helping to push prices to 30-year highs and causing sharp price fluctuations that have little to do with the actual supply of food, says the United Nations' leading expert on food.

Hedge funds, pension funds and investment banks such as Goldman Sachs, Morgan Stanley and Barclays Capital now dominate the food commodities markets, dwarfing the amount traded by actual food producers and buyers. Purely financial players, for example, account for 61 per cent of investment on the wheat futures market, according to the World Development Movement report Broken Markets.

Speculative investment in agricultural commodities in 2011 was 20 times the amount spent by all countries on agricultural aid. Goldman Sachs, the largest player in the agricultural commodities market, earned £600m from food speculation in 2009, and Barclays Capital, the world's third-largest player and largest British bank in this market, earned up to £340m in 2010, according to the report. Goldman Sachs and Barclays Capital declined to comment.

read more http://www.independent.co.uk/news/world/politics/the-real-hu...

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But here is the thing... As a

But here is the thing...

As a conservative, you could defintely argue for the federal intervention and prevention of speculation.

As a libertarian, how could you argue for any government intervention? If speculation causes commodities to rise in price, sad day for you!

Plan for eliminating the national debt in 10-20 years:

Overview: http://rolexian.wordpress.com/2010/09/12/my-plan-for-reducin...

Specific cuts; defense spending: http://rolexian.wordpress.com/2011/01/03/more-detailed-look-a

agreed, but why not even

agreed, but why not even challenge his premise that "speculation causes prices to rise"?

blaming speculation for price rises is akin to blaming messengers for military defeats.

Dr. No, you didn't put enough

Dr. No, you didn't put enough thought into your failed slam against libertarians. Under libertarianism the individual States couldn't have laws prohibiting individuals from growing or raising their own food, as the current system which is supported by liberals and conservatives alike allows for; this in and of itself would alleviate some of the price hikes due to speculation because there would be less speculation due to the very ability that individuals could grow or raise their own food.

Also, it could be argued that as a 'Free' society has laws against murder, rape, and other crimes which infringe upon an individuals personal liberty and undermines the very same 'Free' society, a 'Free Market' could also have minimalistic rules for preservation of the 'Free Market' as well; it would be ludicrous to assume that a 'Free Market' would afford individuals or companies the power to destroy the 'Free Market' itself. Therefore, a 'Free Market' solution might be to sue speculators for the unwarranted raising of the prices of goods, which deprived individuals of the basic necessities for life i.e. a form of limiting of an individuals liberty. Maybe there would be a ban on speculation in total, maybe the idea of a stock market and other financial services, which doesn't create wealth it just transfers wealth from one group of people to another group of people, would be abandoned for direct partnerships and loans to businesses; this certainly would hold more people accountable for their actions, moreso than the stock market does.

In a 'Free Market' society there are too many variables to be able to directly identify what would happen in most instances; only looking at it from a control standpoint would one even assume that nothing would be able to be done about certain situations which may arise.

"Under libertarianism the

"Under libertarianism the individual States couldn't have laws prohibiting individuals from growing or raising their own food, as the current system which is supported by liberals and conservatives alike allows for; this in and of itself would alleviate some of the price hikes due to speculation because there would be less speculation due to the very ability that individuals could grow or raise their own food. "

Firstly, this maybe works for food. How does it work for oil, gas, minerals, cotton, etc.?

Even for food, how many people can grow the many things that are necessary for a healthy human diet? How many people can fish, raise cattle, grow so many types of crops?

"Also, it could be argued that as a 'Free' society has laws against murder, rape, and other crimes which infringe upon an individuals personal liberty and undermines the very same 'Free' society, a 'Free Market' could also have minimalistic rules for preservation of the 'Free Market' as well; it would be ludicrous to assume that a 'Free Market' would afford individuals or companies the power to destroy the 'Free Market' itself."

But when you make rules to "preserve" a free market, does it no longer become a "free market"? This is what President Bush said; to save the free-market system we have to be a little non-free-market.

I guess my problem with libertarianism is that the definition "free market" seems to differ greatly from libertarian to libertarian. Definitions of things like "force", "fraud" etc. stretch wildly. And the justification of using force to force non-force is never really explained...

Plan for eliminating the national debt in 10-20 years:

Overview: http://rolexian.wordpress.com/2010/09/12/my-plan-for-reducin...

Specific cuts; defense spending: http://rolexian.wordpress.com/2011/01/03/more-detailed-look-a

Very interesting article...

but what do we in the liberty movement suggest to improve things? I've been trying to learn more about the Fed and everything, but I still don't understand much about speculators and commodity exchanges or what have you. What can we do, instead of more government regulation and bureaucracy, to prevent this from happening?

"It does not require a majority to prevail, but rather an irate, tireless minority keen to set brush fires in people's minds."-Samuel Adams
http://brushfiresinthemind.blogspot.com/

Link

http://thehungergames.wikia.com/wiki/President_Coriolanus_Snow

Ron! Paul! 2012!

"What if the American people learn the truth" - Ron Paul