How Goldman Sachs make millions betting on the starvation of others

Johann Hari: How Goldman gambled on starvation

Speculators set up a casino where the chips were the stomachs of millions. What does it say about our system that we can so casually inflict so much pain?

By now, you probably think your opinion of Goldman Sachs and its swarm of Wall Street allies has rock-bottomed at raw loathing. You're wrong. There's more. It turns out that the most destructive of all their recent acts has barely been discussed at all. Here's the rest. This is the story of how some of the richest people in the world – Goldman, Deutsche Bank, the traders at Merrill Lynch, and more – have caused the starvation of some of the poorest people in the world.

It starts with an apparent mystery. At the end of 2006, food prices across the world started to rise, suddenly and stratospherically. Within a year, the price of wheat had shot up by 80 per cent, maize by 90 per cent, rice by 320 per cent. In a global jolt of hunger, 200 million people – mostly children – couldn't afford to get food any more, and sank into malnutrition or starvation. There were riots in more than 30 countries, and at least one government was violently overthrown. Then, in spring 2008, prices just as mysteriously fell back to their previous level. Jean Ziegler, the UN Special Rapporteur on the Right to Food, calls it "a silent mass murder", entirely due to "man-made actions."

Earlier this year I was in Ethiopia, one of the worst-hit countries, and people there remember the food crisis as if they had been struck by a tsunami. "My children stopped growing," a woman my age called Abiba Getaneh, told me. "I felt like battery acid had been poured into my stomach as I starved. I took my two daughters out of school and got into debt. If it had gone on much longer, I think my baby would have died."

Most of the explanations we were given at the time have turned out to be false. It didn't happen because supply fell: the International Grain Council says global production of wheat actually increased during that period, for example. It isn't because demand grew either: as Professor Jayati Ghosh of the Centre for Economic Studies in New Delhi has shown, demand actually fell by 3 per cent. Other factors – like the rise of biofuels, and the spike in the oil price – made a contribution, but they aren't enough on their own to explain such a violent shift.

http://www.independent.co.uk/voices/commentators/johann-hari/johann-hari-how-goldman-gambled-on-starvation-2016088.html

Goldman Sachs just announced that it made another $400m in 2012 speculating on Food prices.

http://www.huffingtonpost.com/2013/01/22/goldman-sachs-food-prices_n_2525571.html

Goldman Sach's food speculation turns Global Hunger into Wall St profit
http://www.commondreams.org/headline/2013/01/22-5

Goldman Sachs made $400m pushing up food prices while hundreds of millions starve.
http://theeconomiccollapseblog.com/archives/goldman-sachs-made-400-million-betting-on-food-prices-in-2012-while-hundreds-of-millions-starved

How the Federal Reserve and Goldman Sachs put's up your gas & food bills - via large scale speculation. 
How this will cause a deeper recession in 2013 and more unemployment. 


The large banks currently have $2tn of "excess" reserves.

A large part of the current $2tn of excess bank reserves is currently being used for short term speculation by the speculative banks.
A significant part of this is being used to buy up commodities, principally oil and food.

The oil price is rising against a backdrop of a lowering of future global GDP forecasts.

Rising inflation will make the coming economic slowdown much worse.
Particularly in developing countries like China, but also for most of the populations of America and Europe - they are going to have less disposable income with higher gas and food prices.

Inflation in the developing world and the Brics will eventually follow through in increased prices of their exports, compounding the inflation issue in the developed world.

Meanwhile the Fed continues to pump out new money to the big banks at the rate of $1tn a year.
Adding to the money the banks have available for speculation and thus increasing inflation.
The Fed balance sheet has just gone past $3tn.
It will be $4tn by the end of 2013.

Current Fed policy LOWERS future global GDP growth.
Proportionally more money is spent on basic commodities, there is less money available to buy manufactured goods and manufactured goods will increase in price.

This is basically the inflation tax, when the Fed prints too much money.
It hurts the poor and the middle class hardest.

It will particularly hit people on low fixed incomes, e.g. seniors.
The current method of calculating CPI (Consumer Price Index) drastically understates the contribution to inflation for gas & food.
The inflation adjustment made to pensions every year is well below the inflation rate experienced by pensioners.
The same applies to those on benefits.

Current Fed policy and Goldman Sachs speculation will cause a deeper recession in America in 2013.
It will also cause higher unemployment.
The big banks and the big oil companies don't care though - they are making lots of money out of other people's suffering.