(4 yrs ago)
Demand and supply certainly matter. But there's another reason why food across the world has become so expensive: Wall Street greed.
(4 yrs ago)
They created a casino out of the food industry (just as they did with derivatives that allowed them to bet on any financial asset in the run up to the 2008 crash - that nearly brought down the global economy - and still might...)
These derivatives have zero benefit to the world... they are simply bets on asset price movements.
Of course banks make plenty of money applying this madness to the food industry...
But let's understand that these profits result in artificially higher food prices that cause starvation and misery for hundreds of millions of people around the world.
Perhaps most people don't care about this ... after all, if there is a profit to be made then surely it must be a good thing...
But consider what is happening in north africa and the middle east... these revolutions are triggered by high food prices... and this could come back to haunt...
The Law of Unintended Consequences or unintended consequences is an adage or epigram that can be defined as follows: "Any intervention in a complex system may or may not have the intended result, but will inevitably create unanticipated and often undesirable outcomes"
and for the Islamic Sharia haters among us
Islam prohibited 1400 year ago any selling/trading of food crop before it is ripe to prohibit human greed from doing what wall street is doing right now.
that is practically stopping speculation in crops by just imposing one condition and keeping food prices within reach of those 99.9% who actually eat wheat and rice and not gold and green paper.
Anyone have a view about whether derivatives should only be able to purchased from, say, a governmental authority and only for the purposes of hedging?
You must be logged in to be able to reply.