Two years ago we watched the price of oil skyrocket to over $140 per barrel. Although many initial reports suggested that the price increase was attributable to the growing demand from China and India as these economies became more industrialized, the increasing demand could not really explain such a sudden spike in short term prices. We later learned that both Wall Street firms and their hedge fund partners were driving up the price of oil by using commodity futures. We had seen a similar phenomenon in the early 1970s when the Hunt brothers cornered the silver market using future contracts.
This phenomenon is happening again today with agricultural products. A recent expose done by Ed Shultz on his MSNBC program revealed that Wall Street is speculating with both wheat and corn futures, resulting in a rapid rise in the respective prices.
These price increases are being felt especially in developing economies. In 2008 the Egyptians took to the streets demanding relief from the souring food prices. Many believe that the demonstrations that started in Tunisia and have spread to Egypt and are moving throughout the Middle East are as much attributable to rapidly rising food prices as they are to the cry for democracy.
Kudos to Ed Shultz for reporting in prime time a subject most mainstream journalists do not want to touch.
Here are three links that further enlighten...
http://www.foodandwaterwatch.org/reports/casino-of-hunger-how-wall-street-speculators-fueled-the-global-food-crisis/
http://newsbusters.org/blogs/noel-sheppard/2011/02/02/schultz-blames-egypt-food-prices-bush-41-and-wall-street-no-mention-c
http://www.counterpunch.org/alvarez02042011.html
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