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PHYSICIST-RETIRED

Articles Posted: 58  Links Seeded: 310
Member Since: 9/2008  Last Seen: 5/19/2012

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How Commodity 'Traitors' Create Starvation and Uprisings - Scientific American Blog Network

Seeded on Thu Sep 22, 2011 2:17 PM EDT
Read ArticleArticle Source: Science News, Articles and Information | Scientific American
business, food, wall-street, commodities, starvation, food-prices, civil-unrest, adam-smith, arab-uprising, food-insecurity, commodity-traitors, specualtion
Seeded by Physicist-retired
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According to Bar-Yam and colleagues, by September 2010 there was 140 million metric tons of grain sitting unsold in storage facilities around the world, an amount that would normally feed 440 million people in a single year.

In the face of widespread global hunger, playing with food prices as if it were a casino pushed them beyond the ability of people to pay in regions of the direst need.  Jean Ziegler​, the UN Special Rapporteur on the Right to Food, has called this “a silent mass murder,” entirely due to “man-made actions.”

“We have a herd of market traders, speculators and financial bandits who have turned wild and constructed a world of inequality and horror.  We have to put a stop to this,” he said.

The model that Bar-Yam and colleagues developed had earlier predicted the uprisings popularly known as the Arab Spring.

On December 13, 2010 the researchers submitted a report to Congress warning of the link between rising food prices and global unrest.  Just days later uprisings began in Tunisia followed soon after by Libya and Egypt, eventually spreading to 30 countries and toppling multiple governments.

However, Bar-Yam and colleagues also predict that if global food prices continue to rise at their current rate the threshold that resulted in uprisings in the Arab world will become global between July 2012 and August 2013.  In this context, the riots in London could be an early warning of greater conflagrations to come.

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Physicist-retired

“Food is always more or less in demand,” wrote Adam Smith in The Wealth of Nations.

While the founder of modern capitalism pointed out that the wealthy consume no more food than their poor neighbors, because the “desire of food is limited in every man by the narrow capacity of the human stomach,” the desire for material luxury “seems to have no limit or certain boundary.”

Hunger, therefore, is the foundation of wealth.

Hunger is also the foundation of revolution.

  • 12 votes
Reply#1 - Thu Sep 22, 2011 2:20 PM EDT
jwtiii

'Nother good one, pr. . . Thanks.

  • 6 votes
#1.1 - Thu Sep 22, 2011 3:36 PM EDT
Physicist-retired

Thanks, jw.

Pretty astounding (and convincing) data when it's all laid out like that, isn't it?

I really don't care too much when speculators drive up the price of gold. It's not a great thing, but the impact is relatively small.

But when they do the same thing to oil (very bad) and food (catastrophic), it's a whole different thing.

  • 7 votes
#1.2 - Thu Sep 22, 2011 3:58 PM EDT
RaisedByWolves

Good find, P-R. I've a condition on the Smith quote that I've been thinking about: Consider the obesity happening right now in the USA. And consider our iconographic considerations of "fat cats", of the rich being a bit more zoftig because they had the money to feed themselves all they wished. I just don't see that model being a good one right now, especially considering the article's focus on trading on hungry lives, so to speak.

I'm glad the kids are on Wall Street; more coverage is needed because these people are thieves and sociopaths with little concern for real human life.

  • 2 votes
#1.3 - Thu Sep 22, 2011 4:58 PM EDT
Physicist-retired

RaisedByWolves,

these people are thieves and sociopaths with little concern for real human life.

It reminds me of the conversations we were privy to when Enron was manipulating California's power supply:

KEVIN: So,

BOB: (laughing)

KEVIN: So the rumor’s true? They’re f***in’ takin’ all the money back from you guys? All those money you guys stole from those poor grandmothers in California?

BOB: Yeah, grandma Millie, man. But she’s the one who couldn’t figure out how to f***in’ vote on the butterfly ballot.

KEVIN: Yeah, now she wants her f***in’ money back for all the power you’ve charged right up – jammed right up her a$$ for f***in’ 250 dollars a megawatt hour.

BOB: You know – you know – you know, grandma Millie, she’s the one that Al Gore’s fightin’ for, you know? You’re not going to –

BOB: Grandma Millie –

I spent the last few years of my career on Wall Street (VP, Advanced Technologies). I know these people. They couldn't possibly care less.

  • 4 votes
#1.4 - Thu Sep 22, 2011 5:12 PM EDT
RaisedByWolves

And I was in California at that time. I know they don't care. My grandfather left Wall St. the year before the fall in 1929, took his earnings (nothing great - he was a young broker with a family starting) and headed for California where he opened a second hand store. I remember him saying that he saw the future and it was poor; so, he thought second hand stores were a good idea. Smart guy. He always said that he didn't trust what Wall St. was back then. He'd be freaked now!

  • 2 votes
#1.5 - Thu Sep 22, 2011 6:13 PM EDT
mountainmike-1199289

Thank you for posting this excellent article!

Wall Street was busted for "paper" white collar crime and found themselves not being able to continue in the same direction due to regulators being all over them for fraud and customers no longer trusting them for "paper" speculation. So they went to something physical, commodities and futures. They are not only speculating in oil and food, they are doing this faster than ever with high speed, powerful super computers.

Goldman Sachs is at the forefront of oil and food speculation world wide. They need to be divided up and banned from oil and food speculation.

  • 3 votes
#1.6 - Fri Sep 23, 2011 11:38 AM EDT
Reply
faust-132915

Excellent seed PR, as usual. Now if only there was something we could do about it as speculators are 'thick as thieves' these days.

  • 5 votes
Reply#2 - Thu Sep 22, 2011 4:44 PM EDT
Physicist-retired

Now if only there was something we could do about it

There is something we can do about it, faust (although I seriously doubt that it can be done in the current Washington D.C. environment).

Congress can pass laws that require 'buyers' of commodities like wheat, rice, beef, and oil to actually take possession of those commodities before selling them. That alone would stop this kind of speculation in it's tracks. No Wall Street trader can store 100,000 tons of wheat - but as things now stand, they can bet on it's future price just as if they were playing the machines in Atlantic City.

  • 5 votes
#2.1 - Thu Sep 22, 2011 5:22 PM EDT
mountainmike-1199289

Would you like to see an instant overnight bail out of Main Street that would cost taxpayers nothing at all? BAN SPECULATION IN OIL AND FOOD. Why? That specific speculation causes nation wide inflation. Why should a bunch of greedy slobs be indulged in speculation that causes nation wide inflation?

The price of gas at the pump would be cut in half and everything at the grocery store would cost substantially less.

It was OK for taxpayers to bail out Wall Street, then why is it not more than OK for Wall Street to bail out taxpayers???

  • 5 votes
#2.2 - Fri Sep 23, 2011 11:27 AM EDT
Reply
RACHEL1-933952

Good job, PR!!

Amazing how clear it is in B&W!

  • 3 votes
Reply#3 - Thu Sep 22, 2011 5:06 PM EDT
Physicist-retired

A picture is worth a thousand word, Rachel.

I've been hearing for years now about how 'we can't prove that speculation is driving up the price of food or oil'. Not so. There's absolutely no other way that I can interpret that graph.

  • 3 votes
#3.1 - Thu Sep 22, 2011 5:24 PM EDT
Reply
bore-head007

Because of massive corporate consolidation of agriculture, centrally coordinated global regulations, a devalued commodity-dollar and unrestrained commodity speculation, chemical and genetic modification, and real or manipulated food shortages; there is indeed a war being waged — with food as the primary weapon. Understand, this is a not purely a war on food, but rather a war on the general population. Therefore, it is crucial to understand these tactics in order to defend against them.

Here are six ways food is being used to wage war against the population:

Lots of links, lots of raised eyebrows, lots of evil.

As NOAA moves our commonly shared (the last frontier) resource, fish, to Wall St.

  • 4 votes
Reply#4 - Thu Sep 22, 2011 5:28 PM EDT
mountainmike-1199289

Our troops are in the Mideast allegedly to go after the number one enemy of America. By that rationale, I think we need to close down our quagmires in the Mideast, bring the troops home and invade Wall Street.

They are starving in Africa again, and I wonder what body count could be given to Goldman Sachs for making is much more difficult to establish famine relief.

  • 5 votes
#4.1 - Fri Sep 23, 2011 11:44 AM EDT
bore-head007

From a fisherman buddy of mine.

Link to a long video that has some @!$%#ed up wrong @!$%# from everywhere:
http://dotsub.com/view/8446e7d0-e5b4-496a-a6d2-38767e3b520a
The 2048 no more fish statement has been denied, all right, but the
fact is that the "civilized" world is destroying peoples' lives.
Who are the real pirates?
I'm sad!
I have yet to find the US fishery connection, other than we now import over 85% of the fish consumed in our country.

This guy is a world class fisherman, that has worked in fisherys around the world.

  • 3 votes
#4.2 - Fri Sep 23, 2011 2:44 PM EDT
Reply
VNJD

The model that Bar-Yam and colleagues developed had earlier predicted the uprisings popularly known as the Arab Spring.

If this were true, wouldn't the leaders and participants in the uprisings have said so? As in "we want to topple the regime(s) of Mubarak/Khaddafi/Saleh/Assad because food prices are too high!"

Of all the demands by the people, news coverage and interviews with revolutionaries, I don't remember food prices ever being mentioned.

  • 1 vote
Reply#5 - Thu Sep 22, 2011 7:56 PM EDT
Physicist-retired

VNJD

Of all the demands by the people, news coverage and interviews with revolutionaries, I don't remember food prices ever being mentioned.

This article from January, 2011, might shed some insight into the link between food prices and civil unrest.

Any number of political and social factors underpins the current unrest in Egypt—and as always, economics figures in. The upheaval has shined a light on two serious problems facing the country: Most jobs pay too little, and most food costs too much.

On a side note, I was in Egypt in March, 2010 (my fifth or sixth visit there). My Egyptian friends were talking a lot about food prices. It certainly was a very real issue for them.

There was also a fair bit of coverage on the topic in the U.S. at the time. Numerous articles discussed how rising food prices would not affect Americans much, because we spend less of our total income on food than people in poor countries do, and because so much of the cost of American food includes processing, packaging, and distribution - not direct food costs.

In poor countries, food tends to be unprocessed, and sometimes not even packaged. So any rise in prices has a more direct impact on what people pay in the marketplace.

  • 2 votes
#5.1 - Fri Sep 23, 2011 12:29 PM EDT
Reply
Randy McMurphy

Great Piece PR! We have been moving back towards extreme Financial sector primacy, since the 80s. This is reminiscent of the same callous Laissez Faire which was unfazed by human suffering and the bottom line of profit, Proxy puppet states installed by European corporations and government. This had not gone unoticed by our nations founders;

"Retrospect of the Boston Tea Party with a Memoir of George R.T. Hewes, a Survivor of the Little Band of Patriots Who Drowned the Tea in Boston Harbor in 1773,"

A pamphlet was circulated through the colonies called The Alarm and signed by an enigmatic "Rusticus." One issue made clear the feelings of colonial Americans about England's largest transnational corporation and its behavior around the world: "Their Conduct in Asia, for some Years past, has given simple Proof, how little they regard the Laws of Nations, the Rights, Liberties, or Lives of Men. They have levied War, excited Rebellions, dethroned lawful Princes, and sacrificed Millions for the Sake of Gain. The Revenues of Mighty Kingdoms have entered their Coffers. And these not being sufficient to glut their Avarice, they have, by the most unparalleled Barbarities, Extortions, and Monopolies, stripped the miserable Inhabitants of their Property, and reduced whole Provinces to Indigence and Ruin. Fifteen hundred Thousands, it is said, perished by Famine in one Year, not because the Earth denied its Fruits; but [because] this Company and their Servants engulfed all the Necessaries of Life, and set them at so high a Price that the poor could not purchase them."

India bore the brunt of this policy on a scale of misery that did not have to be that is barely imaginable. Ireland as well, When they were exporting produce and livestock while the potato crop failed the staple diet of the Irish "commoner" even though it was not indigenous to ireland and brought there...Landlords quickly kicked out impoverished farmers as they looked the other way when 1/4 of the population was allowed to die.

I was struck by this dialogue in the movie Wall street...art imitating real life, humorous to note what Gekko was convicted of back then was legal in contemporary times

Bud: How much is enough, Gordon? When does it all end, huh? How many yachts can you water-ski behind? How much is enough, huh?
Gekko: It's not a question of enough, pal. It's a Zero Sum game – somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred – from one perception to another. Like magic. This painting here? I bought it ten years ago for sixty thousand dollars. I could sell it today for six hundred. The illusion has become real, and the more real it becomes, the more desperately they want it. Capitalism at its finest.
Bud: How much is enough, Gordon?
Gekko: The richest one percent of this country owns half our country's wealth, five trillion dollars. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons – and what I do, stock and real estate speculation. It's bull@!$%#. You got ninety percent of the American public out there with little or no net worth. I create nothing. I own. We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it. Now, you're not naive enough to think we're living in a democracy, are you, buddy? It's the free market. And you're a part of it. You've got that killer instinct. Stick around, pal, I've still got a lot to teach you.

  • 2 votes
Reply#6 - Thu Sep 22, 2011 10:39 PM EDT
mountainmike-1199289

Here's why we can't regulate speculation.

Cantor Promises Oil Speculators That GOP Will Block Financial Regulations
http://www.youtube.com/watch?v=wcXJR7eZ_jQ

‘Perhaps 60% of today’s oil price is pure speculation’
http://www.globalresearch.ca/index.php?aid=8878&context=va

how today’s oil prices are really determined is done by a process so opaque only a handful of major oil trading banks such as Goldman Sachs or Morgan Stanley have any idea who is buying and who selling oil futures or derivative contracts that set physical oil prices in this strange new world of “paper oil.”

With the development of unregulated international derivatives trading in oil futures over the past decade or more, the way has opened for the present speculative bubble in oil prices.

Since the advent of oil futures trading and the two major London and New York oil futures contracts, control of oil prices has left OPEC and gone to Wall Street. It is a classic case of the “tail that wags the dog.”

A June 2006 US Senate Permanent Subcommittee on Investigations report on “The Role of Market Speculation in rising oil and gas prices,” noted, “…there is substantial evidence supporting the conclusion that the large amount of speculation in the current market has significantly increased prices.”

What the Senate committee staff documented in the report was a gaping loophole in US Government regulation of oil derivatives trading so huge a herd of elephants could walk through it. That seems precisely what they have been doing in ramping oil prices through the roof in recent months.

The Senate report was ignored in the media and in the Congress.

The report pointed out that the Commodity Futures Trading Trading Commission, a financial futures regulator, had been mandated by Congress to ensure that prices on the futures market reflect the laws of supply and demand rather than manipulative practices or excessive speculation. The US Commodity Exchange Act (CEA) states, “Excessive speculation in any commodity under contracts of sale of such commodity for future delivery . . . causing sudden or unreasonable fluctuations or unwarranted changes in the price of such commodity, is an undue and unnecessary burden on interstate commerce in such commodity.”

Further, the CEA directs the CFTC to establish such trading limits “as the Commission finds are necessary to diminish, eliminate, or prevent such burden.” Where is the CFTC now that we need such limits?

They seem to have deliberately walked away from their mandated oversight responsibilities in the world’s most important traded commodity, oil.


Lobbyist In Charge Of ‘Trying To Kill’ Financial Reform Hired By GOP Chair To Oversee Financial Regulations

A few days ago, incoming Agriculture Chairman Rep. Frank Lucas (R-OK) announced the hire of Ryan McKee as the senior staffer to oversee the Commodity Futures Trading Commission. McKee is currently a lobbyist working for the U.S. Chamber of Commerce’s division dedicated to deregulating complex derivatives products. In her new role working for Lucas, McKee will be liaising with regulators in charge of implementing new rules under the Dodd-Frank Wall Street reform law to overhaul the over-the-counter derivatives market.

  • 3 votes
#6.1 - Fri Sep 23, 2011 11:33 AM EDT
Reply
Pat P11111

We did not have a door key for the house that I grew up in. It was a rural community outside of Canton Ohio. I never really thought about it until I left home and went out into the world on my and saw that most people weren't like my parents.

On a visit many years after I had left I asked why they didn't have a key. My father said there was no need since they could turn the deadbolt and be safe at night as they slept. But what about when go out and leave the house unlocked I asked.

My Father replied, "When we are not home there is nothing of importance here."

  • 2 votes
Reply#7 - Thu Sep 22, 2011 11:15 PM EDT
pawancarrot

this is the great peace of infomation.

  • 1 vote
Reply#8 - Wed Jan 4, 2012 3:57 AM EST
Physicist-retired

Thanks, pawancarrot- I thought it was important.

    #8.1 - Wed Jan 4, 2012 9:02 AM EST
    Reply
    1eachBENNIS

    I am so FN angry. Fred Cuny, who wrote the U.N. manual of disaster relief operations said that 9 times out of 10 famines were cause by speculators.

    • 1 vote
    Reply#9 - Thu Jan 5, 2012 12:00 AM EST
    Physicist-retired

    I expect it will get worse, 1each - especially when extreme weather events wipe out crops and domesticated animals, like they did in Texas last year. Speculators jump on that news like flies on honey - and magnify the problem substantially.

    After watching a number of governments fall in the famine-induced Arab Spring, we really should be doing something about this. The U.S. is not immune to similar events. Hungry people will always rise up.

    • 1 vote
    #9.1 - Thu Jan 5, 2012 9:37 AM EST
    1eachBENNIS

    I like to tell people that among other things the Inca used to have huge warehouses of food for their people. Surely a people that can walk on the Moon can feed the neediest among them. Nope. These dirty bastards keep giving capitalism a bad name. They willfully confuse producing something for a profit with making a profit. Not the same.

    Hahaha...God people are so cute when they think that have it all figured out. For example, we will spend Billions on space defense, because MAYBE someone will lash out, but not expend similer amount of dollars for food security and all that it entails. Cart~horse? We subsidise the @!$%# out of ______, but reinforce, augment and employ program's for food security? Bah! nope. Short-sighted in the extreme. Self-inflicted wounds are the worst.

    • 1 vote
    #9.2 - Thu Jan 5, 2012 1:27 PM EST
    Physicist-retired

    Self-inflicted wounds are the worst.

    Just thought that was worth repeating. Good post, 1each.

      #9.3 - Thu Jan 5, 2012 1:56 PM EST
      Reply
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