[GJM] Fw: [globalnetnews-summary] Feeding frenzy

[mary rose]

As I indicted some time ago, there are some things
that just should not ethically be commodified.  And,
it may be that nothing should be commodified if
one considers the ethics of commodificiation.

It may very well be that neither a national or an
international currency system is viable when one
considers the ethical ramications of the system in
terms of global justice.

I have been contending for a long time that people
need control of the money at the local level, at the
level of production.  People need to take care of
themselves first and only after this has happened
should any thing be sold in the marketplace.
Subsistence has to be the first concern.  And when
you have outside ownership and control, then the
money is taken out of the community.

And, if there is either a national or an international
currency, then the people at the local level must also
have a currency to ensure that they are getting thier
fair share.

mary rose


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Sent: Sunday, June 01, 2008 12:48 PM
Subject: [globalnetnews-summary] Feeding frenzy



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For some time we've been warning that industral agriculture is headed for 
trouble, and we can take steps to protect ourselves locally. Now it's 
approaching critical. First excerpts, then whole article from the UK. Eight 
more pages at that link.

paul tradingpost at lobo.net
------------------------------------------

... in the more than 3½ decades he has been farming, he has never seen 
anything quite like this. The prices of wheat, corn, soybeans and rice more 
than doubled in value in the span of several months, sowing equal measures 
of confusion and fear in the American heartland.in the more than 3½ decades 
he has been farming, he has never seen anything quite like this. The prices 
of wheat, corn, soybeans and rice more than doubled in value in the span of 
several months, sowing equal measures of confusion and fear in the American 
heartland. ... At the same time, the costs of fertilizer, herbicides and 
fuel - all crucial to agriculture - have skyrocketed to record heights: Mr. 
Giessel's expenses alone jumped half a million dollars in the past year, 
twice what they normally are.

One big culprit in the global food crisis has been overlooked: The money. 
Pension and index funds used a loophole to plow hundreds of billions of 
dollars into commodities markets. .. These funds have plowed tens of 
billions of dollars into agricultural commodities as a way to diversify 
their assets and improve returns for their investors. .. The amount of fund 
money invested in commodity indexes has climbed from just $13-billion (U.S.) 
in 2003 to a staggering $260-billion in March, 2008, according to 
calculations based on regulatory filings.

Michael Masters, a veteran U.S. hedge fund manager, warned a Senate hearing 
this month that this number could easily quadruple to $1-trillion ... "If 
immediate action is not taken, food and energy prices will rise higher 
still," he told the hearing. "This could have catastrophic economic effects 
on millions of already stressed U.S. consumers. It literally could mean 
starvation for millions of the world's poor."
-----

Feeding frenzy
May 31, 2008
http://www.theglobeandmail.com/servlet/story/LAC.20080531.RCOVER31/TPStory/TPBusiness/America/

One big culprit in the global food crisis has been overlooked: The money. 
Pension and index funds used a loophole to plow hundreds of billions of 
dollars into commodities markets

LARNED, KAN. -- Tom Giessel rubs the heel of his palm against his forehead, 
exhales a moment, and then begins again, trying to make sense of how the 
global food market has suddenly descended into chaos.

He is seated on a couch in his modest white farmhouse, surrounded by acres 
of wheat that in a few days will begin to flower, blanketing this central 
Kansas town with millions of tiny green beards. Beside him, a sheaf of dried 
wheat spills out of a vase, while across the room, a stylized crucifix looms 
above the entrance to the kitchen, a solitary stem writhing on the cross.

For three generations, grain has been his family's lifeblood, a source of 
sustenance and pride, reward and hardship.

Mr. Giessel, 55, lived through the Russian Wheat Deal in the 1970s, when a 
sudden rise in exports to the Soviet Union sparked a boom in prices. He has 
endured credit crises, political embargoes, and the vicissitudes of weather 
and drought.

Yet in the more than 3½ decades he has been farming, he has never seen 
anything quite like this. The prices of wheat, corn, soybeans and rice more 
than doubled in value in the span of several months, sowing equal measures 
of confusion and fear in the American heartland. Commodities markets, where 
these prices take their cue, have become so unpredictable that farmers now 
liken them to blackjack tables in Las Vegas.

At the same time, the costs of fertilizer, herbicides and fuel - all crucial 
to agriculture - have skyrocketed to record heights: Mr. Giessel's expenses 
alone jumped half a million dollars in the past year, twice what they 
normally are.

"It used to be that I could figure on things from year to year," shrugs Mr. 
Giessel, a stout man with dark eyes, thick forearms and a weathered 
countenance. "But now it's like driving down the road with no headlights. 
You can look out the window and see the white lines, but you don't know what 
the hell you're going to hit. This is the most risk I've been exposed to 
since I started farming."

The problems here go well beyond the Kansas border. The record escalation of 
food prices has played havoc with every link in the food chain, from grain 
merchants to futures markets, from publicly traded food companies to 
consumers.

Producers such as Mr. Giessel now find themselves on the front line of a 
mushrooming global crisis, one that has sparked violent protests in some of 
the world's poorest countries, prompting aid agencies to warn of a pending 
humanitarian catastrophe.

In the search for answers, pundits have attempted to pin the blame on the 
usual suspects: rising demand from China and India, bad crop conditions and 
booming ethanol production.

Yet one major culprit behind these gyrating markets and unprecedented price 
spikes has been largely overlooked: the deep-pocketed pension and index 
funds upon which most Canadians and Americans depend for their retirements.

These funds have plowed tens of billions of dollars into agricultural 
commodities as a way to diversify their assets and improve returns for their 
investors.

The amount of fund money invested in commodity indexes has climbed from just 
$13-billion (U.S.) in 2003 to a staggering $260-billion in March, 2008, 
according to calculations based on regulatory filings.

Michael Masters, a veteran U.S. hedge fund manager, warned a Senate hearing 
this month that this number could easily quadruple to $1-trillion, if 
pension funds allocate a greater portion of their portfolio to commodities, 
as some consultants suggest they are poised to do. Because agricultural 
markets are small - relative to stock markets - the amount of cash pouring 
in gives these funds substantial clout. Mr. Masters estimated that that 
these big institutional investors control enough wheat futures to supply the 
needs of American consumers for the next two years, and blamed the "demand 
shock" from these recent entrants to the commodities markets as arguably the 
primary factor behind the sudden take-off in food prices.

"If immediate action is not taken, food and energy prices will rise higher 
still," he told the hearing. "This could have catastrophic economic effects 
on millions of already stressed U.S. consumers. It literally could mean 
starvation for millions of the world's poor."

Continued on Page 2.
http://www.theglobeandmail.com/servlet/story/LAC.20080531.RCOVER31/TPStory/TPBusiness/America/?pageRequested=2
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