Speculation And The Engineering Of The Food Crisis
Frederick Kaufman discovers Goldman Sachs' pivotal role in the rising food prices that have led to a global problem.
Among the reasons cited for the increasing cost of food are American appetites, rising oil prices, and genetically modified crops. Frederick Kaufman believes there is just one main culprit: Wall-Street.
Speculation is a sullied term in light of a worldwide recession. But the basic convention of buying low and selling high plays its part in the functioning of any healthy market economy. And it used to play a welcomed role in the commodities market (food, fuel, and labor), insulating farmers from the natural volatility of the industry as the price of grain was agreed upon even before the wheat was grown. The ‘future’ of a commodity allowed farmers to hedge against lean times and at other times invest in their businesses. As a result, the real price of wheat decreased over the course of the 20th century and America became a model for successful agribusiness.