By Kellene Bishop
Personally, I'm more inclined to state that our government and their Wall Street and Federal Reserve cohorts are actually manipulating food prices in much the same way they are manipulating gold prices, fuel prices, ammo and firearm prices, and the value of the USD. However, one of the people that I consider a mentor is G. Edward Griffin, and today Mr. Griffin released an article and video link which takes the position that Wall Street is speculating on food thus making the food prices escalate all over the world, not just in the U.S. I think he's simply being kind because I've no doubt that what we're seeing nowadays is a battle of manipulation and as long as you're a human who needs sustenance to live, then you're a part of that battle. We are outmanned, outgunned, and underfunded to really fight back against such manipulations and thus the only certain way we have of countering this strategy is to stock up on the essentials that we need. If you are --to utilize coupons, then you're going to be that much more ahead of the game as well.
If you haven't heard of G. Edward Griffin yet, then allow me to introduce him to you. He's one of my all-time favorite authors--even more so than Ayn Rand, because not only does he write exceedingly well, but he lives his life according to his conscience. I HIGHLY recommend that you read at least the first 200 pages of his famous book "The Creature from Jekyll Island." If you just HAVE to have the cliff notes of the book, then read "Jackals at Jekyll Island" by Richard Sizemore or "Dishonest Money: Financing the Road to Ruin" by Joseph Plummer with a foreword written by G. Edward Griffin. (I also LOVE the book "A World Without Cancer" by G. Edward Griffin as well.)
I was honored to have the privelege of interviewing G. Edward Griffin back when I made time for a weekly radio show. That was quite a coup to pull off for my little ole show and I was thrilled that he honored me with his time. Using regular earphones over a phone line and working with a small-time producer, my show was honored to be the #1 show for that particular network (which was very small, mind you) and it's thanks to interviews like this that got me there, I'm sure. (Because I snagged Mr. Griffin in spite of the mediocre technology and amateur production skills) Anyway, if you'd like to listen in on the interview you can still find it here: http://www.blogtalkradio.com/doctorprepper/2011/10/19/preparedness-pro
GEG (as I constantly refer to him) also has a fabulous website, The Reality Zone. If you subscribe you will get a weekly e-mail that will highlight the issues going on that aren't likely to hit the mainstream newsfeed but which are critical to for those who would be prepared. After all, if you aren't informed, how are you to know what depth the hole is that you're having to dig yourself out of, right?
Anyway, this week I was perusing my Realty Zone e-mail and came across this link that GEG saw fit to elaborate on significantly more than normal, along with a link to the YouTube video that elaborates his position. I felt this piece was a great supplement to a couple of other articles that I have planned for during "100 Days of Prepping" series. So, giving him absolutely FULL credit for this portion, and responding to his encouragement for his readers to "spread the word", I'm posting this piece in which he illustrates that Wall Street is speculating on food costs, and as such, is causing the cost of food to rise even more than it already is in response to the natural disasters, droughts, contamination issues, food recalls, GMO concerns, and a declining value in the USD. In other words, "they" are manipulating the price of food; we all know darn well that if ever there were a "8% Food Tax" passed in Congress there'd likely be World War III, right? So instead of making it a political issue to wield control, the point of the spear is directed to Wall Street--aka the lackeys of the Federal Reserve and government who get paid handsomely out of the pockets of tax paying Americans. *sigh*
I hope this gives you a bit of insight into what's really going on in our economy, particularly as it relates to the food costs and other key essential items, and that such information will help you to be just a little sharper and more informed as you make decisions that are best for yourself and your loved ones.
(As seen on http://www.realityzone.com/currentperiod.html#foodbet)
Speculation by Wall Street traders is causing food prices to rise. Goldman Sachs made over $400 million from betting on food prices
Betting on a horse race has no effect on which horse will win. It only effects the bettors. The winners derive their profits solely from the losers. Likewise, speculating on the future price of food has little effect on its future price at all. Only supply-and-demand does that. The present price, however, can be affected by speculation, because contracts for future delivery are sold to the highest bidder, and that generally pushes up the price – but only in the short run.
Speculators know that food prices, because of global diminishing supply and increasing demand, are going to rise greatly in the future; so, they buy contracts today for food to be delivered at a later date. They are willing to pay a little more than the current price because they are confident the price will be much higher when they take ownership of it. Another scenario is for them to actually acquire the food today and warehouse it while the price rises. The process of taking food off the market and putting it into warehouses decreases the present supply and pushes up the price. Eventually, they plan to sell at the higher price and, thereby, make a profit.
Ethically, there is nothing wrong with that. Most people would be glad to stockpile, let’s say, ten cases of canned goods knowing that, in a few years, they might be worth twice what they paid for them. Wouldn’t that be a better way to protect one’s wealth than putting money into a savings account where it earns 2% interest and when income tax must be paid on the interest?
Many industries use this hedging technique to protect against unexpected price jumps in the raw materials they use. It is common practice in the food industry. Problems arise when speculators (such as banks and investment funds) move into the field. They have no use for the commodities they are buying but consider these contracts as bets in a casino. This causes the amount of money flowing through the futures market to greatly exceed the industrial portion, and the surge of buy-and-sell orders often is totally unrelated to conditions that legitimately affect supply and demand for the commodity in question. The usual result is that commodity prices are bid up to unrealistically high levels.
Can this affect the price of food when it finally is sold into the real marketplace and enters the food chain? The answer is yes – and no. Yes, it can increase the price at the time a futures contract is created. Those accepting immediate payment for future delivery also realize that costs are rising and they wisely include a safety margin which, in their opinion, is adequate to cover the risk. So, the price for future delivery usually is higher than for present delivery. When commodities are taken out of the current market and stockpiled in a warehouse, this increases present demand and that, also, causes present prices to rise. Finally, there is the psychological effect of seeing rising prices on future contracts. This can have a powerful impact on present prices as well.
All of this, however, is primarily a temporary effect because, eventually, as old contracts are settled, the market price still responds to the stronger forces of supply-and-demand. If last year’s “buying” speculators were overly optimistic about how high prices were heading, they will lose money on their bets, and that will have a damping effect on current speculation. If the cost of warehousing exceeds the anticipated rise in prices, those speculators also will lose money. Speculators carry a lot of risk, and they constantly must make adjustments in their formulas to keep in step with reality.
The net effect of speculation in the market is to push commodity prices today to where they would be nine months from now anyway. In the long term, prices are determined by supply-and-demand.
There is no question that speculation has caused food prices to rise sooner than they would have done without speculation, but the far greater cause is diminishing food production. Government intervention into agriculture and massive poisoning of the Earth’s air, soil, and water have more to do with that than speculators. Perhaps that is the reason the mass media is so quick to focus the blame on “capitalist” speculators as a diversion from the real culprit: collectivism.
See YouTube Video here:
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