How To Make Money Out Of Hunger

Graphic: Rising food prices

How Global Investors Make Money Out Of Hunger -- Horand Knaup, Michaela Schiessl and Anne Seith, Spiegel Online

In recent years, the financial markets have discovered the huge opportunities presented by agricultural commodities. The consequences are devastating, as speculators drive up food prices and plunge millions of people into poverty. But investors care little about the effects of their deals in the real world.

The room in which the world's food is distributed looks everything but appetizing. Bits of paper and disposable cups litter the trading floor at the Chicago Board of Trade (CBOT). Sweaty men in bright yellow, blue or red jackets walk around, seemingly oblivious of the debris beneath their feet, waving their hands, shouting and scrapping over futures contracts for soybeans, pork bellies or wheat.

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My Comment: What is my take .... the idea that food supplies and prices can be easily manipulated by speculators for the long term is not a valid one .... the market is too big and too risky for institutions with large sums of money to have any medium to long term impact on the price and supply of food. Like all bubbles .... they never last, and most investors will lose their money if they decide to play it.

But .... I will make the argument that global investors/speculators and the system that they have spawned have made it not only profitable for farmers to grow crops and to sell them .... but to make it easier for them to plan even bigger developments and food projects. And if these investos and speculators were not there .... I can easily predict with confidence that food supplies will not only decrease but prices (on the black market) will increase. I should know .... I lived in a system that disavowed such speculation (the Soviet Union) .... and it was a complete disaster that brought misery and hunger to tens of millions of people for decades. It was only when free market farming opened up in the former Soviet Union .... that we started to feed ourselves like those in the West.