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"Never forget that it's a lot easier to manipulate money and markets than it is to manipulate 'real' things like people and food."
* But it is not hard to manipulate commodity markets which have a lot to do with food prices.
"The media is reporting many reasons for this problem ranging from soaring demand, cuts in food subsidies, droughts, and government mandates to use more grain-based biofuel. But, another significant factor is at play: unfettered speculation by investment banks. As noted in USA Today, in 2008, "the bulls may not be running on Wall Street, but they're charging in the commodities pits.‰ At issue are the still deregulated commodity markets ushered in by the Clinton administration and the U.S. Congress with the passage of the Commodity Futures Modernization Act of 2000. Before this law, the Commodity Futures Trading Commission (CFTC) served as a cop on the beat, enforcing rules that prevent the distortion or manipulation of prices beyond normal supply and demand. But Wall Street banks and companies such as ENRON and British Petroleum were determined to make a lot more money from speculation by exempting energy-derivative contracts and related swaps from government oversight.
For this reason, the 2000 law allows entities that have no stake in whether adequate amounts of food and fuel are available for ordinary people and commodity-dependent businesses to make huge sums of money by gambling with other people‚s money.
Soon after passage of the 2000 law, "dark" unregulated futures trading markets emerged, most notably the Intercontinental Exchange (ICE) in London -- created by Wall Street and European investment banks and several oil companies. A key practice involves "over the counter index trading" in which hundreds of billions of dollars of pension, sovereign wealth, and other institutional funds are used to flood "dark" commodity markets to buy and hold futures contracts without an expiration date or oversight. When it's time to make money on a losing bet, these funds are withdrawn, causing commodity price crashes and economic instability.
These transactions don't involve customary "bona fide commodity traders, such as an airline company hedging on the price of jet fuel by purchasing futures contracts. As prominent hedge fund manager Michael McMasters noted before a U.S. Senate panel in 2008, this amounts to "a form of electronic hoarding and greatly increases the inflationary effect of the market. It literally means starvation for millions of the world's poor. . . " source: http://counterpunch.org/alvarez02042011.html
I would say Obama's GMO moves have a lot to do with "cornering" market share in this new era of destabilization. Control food markets and you have an amazing bargaining chip with which to try to stay in a power position.
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