Saturday, October 16, 2010

big financiers now betting on world hunger

NewsJunkie | Recently, of all people, the President of the World Bank, Robert Zoellick, said that “for the first time in history more than a billion people go to bed hungry every night”. Zoellick also added that the United Nations Millennium Development Goal to eradicate hunger by 2015 “will not be achieved”. Recent natural disasters are only compounding the problem for food commodities, and potential very serious food shortage.

The monsoon in India and the killer floods in Pakistan have devastated the region, and have destroyed crops and livestock. In just a few months, the price of rice and tea has increased by more than 30 percent. In Russia, the fires that swept through the farmland have dramatically reduced the wheat harvest.

But the upcoming new food crisis looming in our global forecast is more man made than anything else. Raw material, and especially food commodities, are the new prime target for global investors. After betting on property values, and by doing so creating the real estate bubble, the financial “Masters of The Universe” of the financial markets are now turning their undivided attention to agriculture commodities.

International hedge funds are now gambling on basic commodities such as wheat, rice, corn and soy. For example, in September, Amajaro, a London based hedge fund, bought a quantity of cocoa equivalent of 25 percent of all European stocks. Needless to say, a few days later the price of cocoa per tonne skyrocketed and broke all records. After causing the financial collapse, and later profiting from it, the super-wealthy speculators are now focused on making a “killing” by stocking up on food commodities and watching the poor go hungry. How is shock capitalism working for you? Fist tap Big Don.