Want to stop banks gambling on food prices? Try closing the casino

[Judi Lynn]

Want to stop banks gambling on food prices? Try closing the casino

Neither debate nor dictum have stopped bankers betting on the world's food supply, leaving criminalisation as the only option

Frederick Kaufman
Thursday 10 May 2012 02.00 EDT guardian.co.uk

Recent price spikes in global food commodities – most notably the bubbles of 2008 and 2010-11 – have exposed a fundamental fault of economic analysis: although speculation in the world's food supply has long been suspected, no one has been able to prove it. The world's most precious resources may have been transformed into a casino for high rollers such as Goldman Sachs, JP Morgan Chase, Barclays and Deutsche Bank, but it's nearly impossible to figure out who is betting how much.

Consequently, the UN general assembly recently convened a high-level debate on speculation in global food commodity markets. The discussion lasted all day before ending with earnest calls for further study of this important issue. In other words, business as usual.

Afterwards, I caught up with one of the afternoon panellists, Michael Greenberger, a former director of the division of trading and markets at the US Commodity Futures Trading Commission (CFTC). During his CFTC tenure, Greenberger supervised exchange traded futures and derivatives, which makes him an expert on just those financial instruments that are bringing chaos to global commodity markets.

Unlike the other panellists who spoke to the general assembly, Greenberger was no longer debating whether or not speculation had skewed the global price of food. Instead, he was trying to figure out how to close down the casino. The Dodd-Frank act – the latest, greatest attempt to regulate the commodity business – has been thoroughly defanged by Wall Street interests.

More:
http://www.guardian.co.uk/global-development/poverty-matters/2012/may/10/stop-banks-gambling-food-prices

[Prometheus Bound]

1. It's one thing to make it illegal in the U.S.

I doubt that will slow down the likes of Goldman Sachs, JP Morgan Chase, Barclays and Deutsche Bank.

[AynRandCollectedSS]

2. I was just reading...

...the newest Matt Taibbi article in Rolling Stone. While discussing the various bubbles that have been created--including food--and the fact that the austerity necessary to rebalance the economy after they burst is always shoveled onto the working class (as in, NOT the people who created the crises to begin with!) he states:

"Bankers have to find new ways of making money that don't just involve betting the hot table and taking out instant billion-dollar profits. They have to go back to building real businesses and being content with gradual returns over time. If there's going to be austerity, it has to be for everybody."

Hear, hear!