Are Hedge Funds and Financial Speculation Behind the Food and Oil Crisis?

[Dover]

Some articles about this:

U.N. says markets are to blame for world food crisis

...This is not a conspiracy theory," he said.

Across the globe foods from bread to milk have become more expensive and in some countries helped fuel inflation. High prices for rice, beans and other food staples provoked food riots in Haiti this week.

"The lack of confidence in the (U.S.) dollar has led investment funds to look for higher returns in commodities ... first metals and then foods," Graziano told a news conference in the capital.

Investors have speculated in commodities including wheat, corn and rice because stocks in recent years have been drawn down by rising demand in emerging markets and supply shortages due to adverse climate in key producer nations, Graziano said.

"Speculative attacks become possible when you have low reserves," Graziano said.

Stocks of some food crops have fallen to their lowest levels in three decades, according to Brazilian farm experts.

http://news.yahoo.com/s/nm/20080410/wl_nm/brazil_un_food_dc

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Hedge Funds and Commodities:
http://dealbook.blogs.nytimes.com/2008/03/20/cnbc-video-faber-on-hedge-funds-and-commodities/

Are Hedge Funds Contributing to World Hunger?
http://thepanelist.com/Opinions/Opinions/_20080415929/

Financial Speculators Reap Profits From Global Hunger
http://www.wsws.org/articles/2008/apr2008/hedg-a24.shtml

Hedge Funds Driving Up The Price of Gasoline and Other Commodities:
http://lawprofessors.typepad.com/banking/2008/04/hedge-funds-dri.html

Thanks to Tadd Tobkin for this controversial article which raises the argument that even Calpers, which most people think of as one of the most socially concerned institutional investors, must assume some blame for the fact that food prices in third world countries have risen to the point that people are starving -- a result of institutional investors "pushing a wall of money into the $200bn commodity index funds."

Fed Calls For Transparency of Hedge Funds
http://www.cbsnews.com/stories/2008/04/15/business/main4016629.shtml

And this from 2004:
http://www.businessweek.com/magazine/content/04_35/b3897042_mz011.htm

[Zynx]

1. Certainly. They are as much to blame for this as fundamentals.

Most commodities markets are quite small. Add dozens of well financed active hedge funds and prices soar.

[WCGreen]

2. Unfortunately, Hedge Funds and rampant speculation are the

fundamentals these days.

Remember when it took about a century for an economic bubble to appear, burst and devastate?

Now, faster than CNBC can change anchors, a new bubble appears.

[sam sarrha]

3. X-ECONOMIC ADVISER TO SEVERAL PRESIDENTS ON CNN SAID OIL SHOULD BE $40-$60 BARREL IF IT WEREN'T FOR

SPECULATORS AND HEDGE FUNDS


W's LOOTING CRONIES ARE LIKE A BUNCH OF FUCK'n MONKEYS AT A SALAD BAR

[grasswire]

4. shock and awe hits the pantry

I believe the Bushies will gin this up. Their motto: Chaos=profit.

[crazymans economics]

5. Thanks for putting this together

I posted this on my blog, www.crazymanseconomics.blogspot.com, and gave you and DU full credit for it.

Hope you don't mind.:yourock:

[Dover]

9. Happy to contribute crazyman...n/t

[sendero]

6. I tihink it'sa bit more complicated than that..

.... the crash of the dollar has a lot to do with the whole mess - and certainly the hedges funds and the debt bubble have put folks in a position of trying to find somewhere, anywhere to put money that is relatively safe and productive.

Hence commodities.

[Joanne98]

7. Yes. Let the market decide, who should live and who should die..

Milton Friedman... Just kidding!

[Joanne98]

8. Here's the commodities market oracle comment...

They're predicting good times ahead..
http://www.marketoracle.co.uk/Article4481.html

[Robert Oak]

10. another in depth analysis

blog post called Peak Everything! goes into some fairly in depth analysis including commodities speculation.

[leftofthedial]

11. in one way or another,

capitalism is the cause of or is a severely compounding factor in nearly every major problem on earth.

[Paine]

12. how to get our country back?

Thank you for explaining the situation. The question is, what can be done to prevent hedge funds and speculators from literally creating a world wide depression in order to make a few bucks for themselves? How can they be stopped? The Fed rolls over and gives to Wall Street heavies whatever they ask for. They seem to actually own the country now.

[fasttense]

13. It can be stopped by seriously restrictive regulations.

Just putting back the anti-trust laws and anti-Great Depression regulations instituted by FDR would help a great deal. But in the end the only way to stop it is get the bushes out of the government.

But until they quit using our government as a honey pot, things will get worse. I expect that after the election, things will really fall apart because there will be nothing holding the republicans back from trashing and raiding everything they can touch.

Impeachment would have solved a lot of these problems.

By the way welcome to DU Paine. Glad to have you here.