Busted: Bankers and The Global Economy

September 24, 2010

U.N. Says World is at the Brink of Food Crisis through Speculation

Environmental disasters and speculative investors are to blame for volatile food commodities markets, says UN’s special adviser

The United Nations warned that the world is likely on the brink of a major new food crisis caused by environmental disasters and rampant market speculators today at an emergency meeting on food price inflation.

The U.N.’s Food and Agriculture Organization (FAO meeting in Rome, Italy, on September 24 was called last month after a heatwave and wildfires in Russia led to a draconian wheat export ban while food riots broke out in Mozambique, killing 13 people. U.N. experts heard that pension and hedge funds, sovereign wealth funds and large banks who speculate on commodity markets are likely to be responsible for inflation in food prices being seen across all continents.

In a new paper released this week, Olivier De Schutter, the U.N.’s special rapporteur on food, says that the increases in price and the volatility of food commodities can only be explained by the emergence of a “speculative bubble” which he traces back to early this decade.

“[Beginning in] 2001, food commodities derivatives markets, and commodities indexes began to see an influx of non-traditional investors,” De Schutter writes. “The reason for this was because other markets dried up one by one: the dotcoms vanished at the end of 2001, the stock market soon after, and the U.S. housing market in August 2007. As each bubble burst, these large institutional investors moved into other markets, each traditionally considered more stable than the last. Strong similarities can be seen between the price behavior of food commodities and other refuge values, such as gold.”

He continues: “A significant contributory cause of the price spike [has been] speculation by institutional investors who did not have any expertise or interest in agricultural commodities, and who invested in commodities index funds or in order to hedge speculative bets.”

A near doubling of many staple food prices in 2007 and 2008 led to riots in more than 30 countries and an estimated 150 million extra people going hungry. While some commodity prices have since reduced, the majority are well over 50% higher than pre-2007 figures – and are now rising quickly upwards again.

“Once again we find ourselves in a situation where basic food commodities are undergoing supply shocks. World wheat futures and spot prices climbed steadily until the beginning of August 2010, when Russia – faced with massive wildfires that destroyed its wheat harvest – imposed an export ban on that commodity. In addition, other markets such as sugar and oilseeds are witnessing significant price increases,” said De Schutter, who spoke today at The U.K. Food Group’s conference in London.

Gregory Barrow, of the U.N. World Food Program said: “What we have seen over the past few weeks is a period of volatility driven partly by the announcement from Russia of an export ban on grain food until next year, and this has driven prices up. They have fallen back again, but this has had an impact.”

Sergei Sukhov, from Russia’s agriculture ministry, told the Associated Press during a break in the meeting in Rome that the market for grains “should be stable and predictable for all participants.” He said no efforts should be spared “to the effect that the production of food be sufficient.”

“The emergency U.N. meeting in Rome is a clear warning sign that we could be on the brink of another food price crisis unless swift action is taken. Already, nearly a billion people go to bed hungry every night – another food crisis would be catastrophic for millions of poor people,” said Alex Wijeratna, ActionAid’s hunger campaigner.

An ActionAid report released last week revealed that hunger could be costing poor nations $450 billion a year – more than 10 times the amount needed to halve hunger by 2015 and meet Millennium Development Goal One.

Food prices are rising around 15% a year in India and Nepal, and similarly in Latin America and China. U.S.  maize prices this week broke through the $5-a-bushel level for the first time since September 2008, fueled by reports from U.S. farmers of disappointing yields in the early stages of their harvests. The surge in the corn price also pushed up European wheat prices to a two-year high of €238 a ton.

Elsewhere, the threat of civil unrest led Egypt this week to announce measures to increase food self-sufficiency to 70%. Partly as a result of food price rises, many middle eastern and other water-scarce countries have begun to invest heavily in farmland in Africa and elsewhere to guarantee supplies.

Although the FAO has rejected the notion of a food crisis on the scale of 2007-2008, it this week warned of greater volatility in food commodities markets in the years ahead.

At the meeting in London today, De Schutter said the only long term way to resolve the crisis would be to shift to “agro-ecological” ways of growing food. This farming, which does not depend on fossil fuels, pesticides or heavy machinery has been shown to protect soils and use less water.

“A growing number of experts are calling for a major shift in food security policies, and support the development of agroecology approaches, which have shown very promising results where implemented,” he said.

Green Party Parliament Member Caroline Lucas called for tighter regulation of the food trade. “Food has become a commodity to be traded. The only thing that matters under the current system is profit. Trading in food must not be treated as simply another form of business as usual: for many people it is a matter of life and death. We must insist on the complete removal of agriculture from the remit of the World Trade Organization,” she said.

You can read this article by Guardian environmental editor John Vidal, with reporting by various news agencies, in context here: http://www.guardian.co.uk/environment/2010/sep/24/food-crisis-un-emergency-meeting-rome

July 8, 2009

Pope Proposes New Financial Order

According to the Associated Press, Pope Benedict XVI has called for a new world financial order guided by ethics, dignity and the search for the common good in the third encyclical of his pontificate.

November 10, 2008

The Global Finance Summit Rush to Rhetoric

bretton-woodsInternational hullabaloo from UK, France, and Germany for a new international financial architecture moved the G7 Finance Ministers into action. US president George Bush has snubbed the U.N. proposal to host an international summit, instead promoting an G8 summit of key leaders in Washington D.C. on November 15th. If successful, this may be the greatest chance since 1944 to influence the structure of international finance since the Bretton Woods accord. The proposals so far want to put the world’s leading industrialized economies and a select few emerging economies in charge, generally referred to as the G20. The role of central bankers is curiously absent in publicity. Doubtless, central bankers have the pulse of the situation and probably are largely responsible for a more conservative response to the European Union’s vivid promotion and sweeping enthusiasm last month.

global-financial-agreement1Activists have urged world leaders not to lose sight of perceived international challenges like climate change and poverty as authorities focus their efforts to repair the world’s financial system. Politicians are concerned about such things. Central bankers are not.

Not to be outdone or completely humiliated, the president of the U.N. General Assembly announced a high-level task force to review the global financial system, including the World Bank and IMF. ~ E. Manning

October 19, 2008

United Nations wants in on Economic Authority

As the world basks in turmoil of a global financial crisis and proposals of special summits by various world leaders, the United Nations has offered French President Nicolas Sarkozy the U.N. headquarters in New York access and use of their facilities for an international summit. Not long ago, the European Union and Sarkozy sought out U.S. President George Bush. The resulting insider news is that George Bush will be sponsoring a global economic summit in hopes of responding better to the crisis. Sarkozy has appealed to prime economic world leaders to act aggressively and in unity to address the economic meltdown at a summit by December.

The United States has been somewhat hesitant to initiate many of financial policies that some European Union leaders are eager for and relunctant to get involved with the U.N. and Europe. Instead, the Bush administration is working feverishly to put out the nation’s economic fires and to deal with them successfully behind the scenes.

What does the United Nations say? The United Nations considers itself as “the symbol of multilateralism.” U.N. leadership believes that it holds the keys to a universal legitimacy to the endeavor to “demonstrate a collective will to face this serious global challenge.” The United Nations needs the good publicity and a way to wield global influence as well. What better way wield influence than to sponsor a global economic summit in a time when the world scene looks so dark?

Sarkozy is calling to overhaul the global financial system so that it can be better supervised in the wake of the crisis. “Together we need to rebuild a capitalism that is more respectful to man, more respectful to the planet, more respectful to future generations and be finished with a capitalism obsessed by the frantic search for short-term profit.” Those seem to be poetic words for a hurting world that is seeking solace and security from a global debacle wrought by speculation and greed. What will national leaders give up to secure a better future in the eyes of politicians and global economists? The future of currency systems seems to be in question now with some “new ideas” that are likely to be presented. ~ E. Manning

August 20, 2008

What’s the Digital Economy; Does it Matter?

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For the past two centuries, the hallmark of the American economy has been that the United States is almost always first in inventing and implementing cutting-edge technologies. That has been true in every area from ranging from semiconductors to computers, vaccines, pharmaceuticals, automobiles, electronics, aeronautics, TV and radio, but has been diminishing. The economic and creative engine that drove world technology has been decentralized. Exploration and hard work is no longer the main focus of technology, but rather, control of what exists has become the focus of technology. Mankind has adopted a kind of fatalistic mindset of self-imposed limitations in the name of global power and influence.

Even United Nations reports find that the United States is no longer a world leader, but instead has become a follower in the development of technology. This has had somewhat of a chilling effect on the development of publicly-held technologies. World-ruling economic governments no longer hold the power they did, but have essentially relinquished the power to a fascist global corporate oligarchy in the name of expedience, money and the appearance of regional political power over people.

What makes the electronic age of computers so important as it encompasses the globe is that this technology is the means that the coming world will be ruled with. You will be tracked through the very products that you buy and the appliances that serve you via a worldwide global internet, a springboard of what you enjoy now. With that power comes the ability to monitor and ultimately control the population that ultimately must hold the technology in order to function in lockstep with the evolving scope of the new global powers.

The United States is in the middle of this transition politically and philosophically. More and more plaudits and support are given to global thinking and global authority. The new philosophies of climate control, environmental preservation, population support and monetary control are showing themselves to be a new norm in the scope of world influence. National sovereignty is being disposed of in favor of a new brand of global security.

This makes the digital economy very important and a currently misunderstood watchword for a new global movement that, in reality, is happening under our very noses. This movement is all about control of the individual in the name of securing profit and power. Every authority wants to carve out its own niche and is in process of doing so as you read this.

The application of technological change is akin to a lobster being slowly boiled on a stove. The lobster is unaware of the gradual change is its environment until it is too late. The same is true with the technological digital economy that the world is adopting as the ultimate source of connectedness. The truth is that the lobster in the pot is the privacy and freedom that sooner or later, every man and woman craves. By the time the corporate oligarchy is finished with the new system and implementation of the new global mindset, free thinkers will be under the watchful eye of power and subject to full control. This isn’t a sick or twisted conspiracy theory. This is the coming global reality, partly in place at this time.

Soon, in the name of security, you will be willing to give all nature of former rights that you have held and you will convinced be that you are doing yourself a favor. You will become safe as a ward of the State, a new global power that is ready to unfurl its influence on a largely unsuspecting world.

This digital economy involves politics, technology, government and business with the chief purpose of an orderly world built to drain the global population of every economic resource to achieve the ultimate in control and economic redistribution across the globe. It started with the central bankers nearly a century ago and they aren’t finished yet. Get ready for the digital economy coming straight to you.

This coming reality is no small thing. To the uninitiated, it seems outlandish and otherworldly. Current events and realities say otherwise. This has been the functional purpose of this blog from the beginning. Prepare to enter a brave new world sponsored by the International Society of Bankers that rule it.

July 31, 2008

Creation of Wheelbarrow Money

Wheelbarrow money isn’t just a figment of the past or in the annals of German history. It is real and today, just not in the United States. On the other hand, the little nation of Zimbabwe is reorganizing its money in an attempt to meet its outrageous 2,200,000% inflation rate. Obviously, the crazy percentage relates to older and better times.

Last week Zimbabwe released $100 billion notes in a meager attempt to fight the inflationary wheelbarrow syndrome. The day the new banknote hit the streets wasn’t enough to buy a loaf of bread. Today, the new bank note won’t cover that. Inflation has already eroded the value. Now a loaf of bread is $200 billion and if a Zimbabwe citizens longs for a can of Coke, that is a mere $600 billion. Zimbabwe is cutting ten zeros from its currency making $10 billion a revalued one dollar. In headier times, Zimbabwe was the toast of the third-world town.

The problem isn’t over. Inflation is so rampant, monetary units are expected to change again in the near future. Interestingly, just six months ago, this writer heard comparisons of Zimbabwe’s central banking policy to Ben Bernanke’s Federal Reserve of U.S. origin. Naturally, there are plenty of differences, notably that Zimbabwe is certainly not America. The overspending habits, however, are very much alike.

What the pundits say, there are similarities and the fact remains that no single economy is immune from inflation, especially when money policy and overspending is largely ignored. Could it be possible that a wheelbarrow of dollars could be required to buy a loaf of bread? It happened in Germany and if we keep ignoring common sense, nothing is impossible. Taking wealth for granted through fraudulent spending is a dangerous policy.

Debt, like the U.S. national debt, doesn’t go away, unless of course, the United Nations collects donations from larger economies to make that happen. Strangely, while this plan is part of U.N. policy creativity and wishful thinking, the reality is another thing altogether. Whether wealth redistribution plans of the U.N. actually work in 2015 or in 2030, U.N. plans aren’t really about building local economies, but about global empowerment. It isn’t happening for Zimbabwe and the outlook isn’t good for the U.S. either where runaway spending is concerned. Bailing out the world and supporting global governance is part of the reason why the United States national debt is where it is today.

Remember that the current nation of Zimbabwe isn’t promised tomorrow. The United States shouldn’t take the future for granted either. ~ E. Manning

May 15, 2008

U.N. Says World Economy on Brink

The U.N. says the world economy is “teetering on the brink” of a severe downturn.

The U.N.’s mid-year economic projections blamed the downturn on further deterioration in the U.S. housing and financial sectors in the first quarter. The U.N. said the U.S. problems are expected to continue to be “a major drag for the world economy” into 2009.

Looking beyond the financial and housing market, you can find strength. Consumer staples and energy are economic hot spots right now. Whether these hot spots are really good for the economy or not, in times of prosperity and decline, investors can always find a way to make a buck.

The United Nations is really good at spending other peoples’ money. Naturally, they are very concerned during a global downturn because money is harder for them to get.

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