The Food Bubble: How Wall Street Starved Millions & Got Away with It (Harpers july)

[Hannah Bell]

by Frederick Kaufman

The history of food took an ominous turn in 1991, at a time when no one was paying much attention. That was the year Goldman Sachs decided our daily bread might make an excellent investment...

And then it occurred to me: It was neither an individual nor a corporation that had cornered the wheat market. The index funds may never have held a single bushel of wheat, but they were hoarding staggering quantities of wheat futures, billions of promises to buy, not one of them ever to be fulfilled. The dreaded market corner had emerged not from a shortage in the wheat supply, but from...a demand shock...it was old Mike Mulliin's "brainless entity," the investment instrument itself, that had taken over and created the effects of a traditional corner...

The wheat harvest of 2008 turned out to be the most bountiful the world had ever seen, so plentiful that even as hundreds of millions slowly starved, 200 million bushels were sold for animal feed. Livestock owners could afford the wheat; poor people could not..USDA eventually revealed that 657 million bushels of 2008 wheat remain in US silos after the buying season, a record-breaking "carryover"...

No link: from the 7/10 hard copy issue


Remember the wheat panic of 2008?

Remember how it was because of "bad harvests" or "peak oil" or "overpopulation" per most of the media & the pundits at DU?

Remember the rice panic that followed it?

Financial speculation. By the usual suspects.

Detailed explanation in the article, recommended.

author's & sources' Prediction is: it will happen again. Financiers want more volatile commodities markets because there's more profit in it; thus they designed new instruments to that end.

[Donnachaidh]

1. Hannah -- link? n/t

[Hannah Bell]

2. no link; from the july hard copy issue, which i got in the mail today.

not on their website yet, which is here:

http://harpers.org/

[glitch]

3. Thanks for posting. K & R nt

[Donnachaidh]

5. yeah, saw that after I posted -- major brainfart.

Will pick up a copy this weekend - thanks!

[Hannah Bell]

13. decent issue - has article on arizona thing as well, & one on henry roth,

author of one of the most beautifully written, saddest endings of an english-language novel...

""He might as well call it sleep. It was only toward sleep that every wink of the eyelids could strike a spark into the cloudy timber of the dark, kindle out of shadowy corners of the bedroom such myriad and such vivid jets of images - of the glint on titled beards, of the uneven shine of roller skates, of the dry light of the grey stone stoops, of the tapering glitter of rails, of the oily sheen of the night-smooth rivers, of the glow on thin blonde hair, red faces, of the glow on the outstretched, open palms of legions upon legions of hands hurling toward him....that ears had power to cull again and reassemble the shrill cry, the hoarse voice, the scream of fear...

It was only toward sleep one knew himself still lying on the cobbles, felt the cobbles under him, and over him and scudding ever toward him like a black foam, the perpetual blur of shod shod
and running feet, the broken shoes, new shoes, stubby, pointed, caked, polished, buniony, pavement-beveled, lumpish, under skirts, under trousers, shoes, over one and through one, and feel them all and feel, not pain, not terror, but strangest triumph, strangest acquiescence. One might as well call it sleep. He shut his eyes."

[Hannah Bell]

14. k

[Hannah Bell]

15. k

[elehhhhna]

4. HANNAH! Thak you for posting this -- I got the issue today as well &

looked for it to post here.

YOU ROCK.

k,r

[madrchsod]

6. i knew the rice market was being manipulated but...

i did`t notice the wheat manipulation. yes the commodity market is a great place to make a lot of money if your willing to bet on how many people are going to die.

[jgraz]

7. These parasites are fighting a quiet war against the rest of humanity

We need to stop them. By any means necessary.

[Greyhound]

9. Realization is only the first step. That everybody on earth in control of a significant military

force works for them (or are them), is the problem that must eventually solved.

[Greyhound]

8. People just don't get what is and has been done with these inconceivable oceans of money

that were accumulated and grown over the last century of so, but that grew exponentially since Reagan allowed them to loot, first the pensions, then... well you know.

This is still that money divided and grown just like a virus. There's a very good reason these 'pools' are 'dark'.

[Warpy]

11. It's a direct result of wealth concentration away from labor

Labor spends most of the money it gets, always has. Concentrate the wealth away from labor and you end up with enormous fortunes looking for ways to get larger, bidding up anything it can find that has a ghost of a chance of returning a profit: stocks, bonds, commodities, baseball cards.

Meanwhile, labor falls farther and farther behind and finds it must supplement poor wages with debt.

This is what caused this whole stinking mess, wealth concentration meeting financial deregulation.

[Greyhound]

12. Yes we're describing the same thing from different ends.

The concentration of wealth was begun, in this cycle, by the direct theft of pensions and multiplied through enforced contributions into a fixed market. So-called "retirement plans" are an explicit tax on workers directly to these "private" parasites.

And what you describe is what I was writing about, so much money that there is literally nothing that they cannot manipulate to take even more.

What concerns me is the apparent inability of people to see how this ends.

[Warpy]

10. I posted that at the time

and the first sign that the CDS/SIV/derivatives market was going bust bigtime was a run on hedge funds in August/September 2008, causing them to dump all their commodities at bargain basement prices in order to raise fast cash. Remember the way commodities prices crashed then?