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Saturday, May 31, 2008

Famine...and Greed



Have you met Rebecca? If not, you’ve yet to meet a fascinating individual...and a wonderful writer. It’s not too late to get to know her. Why not start with her latest post?

Funny how wheels and cogs, however far apart, spin and intermesh.

I’ve been rather quiet, lately (sorry about that). It’s not that my mind has been somnolent. It hasn’t been. It has never been (I doubt it ever will be). I’ve been distracted, ailing. In regards to my own life, my own bedraggled heart, well, there’s been a modicum of tranquility. The worst is behind me. I’ve come to accept my failings. I’ve done my penance. I’ve been bloodied and humbled (deservedly so). I’ve been healing. I would be most grateful, truly, if my immune system would eventually read the memo...

But this entry is not about me. It is about famine and greed. Rebecca lit the fuse. The photograph she posted (and the accompanying narrative) arrived at the very same time while I had been contemplating financial matters...investments...the price of vital commodities...and the resulting consequences.

I had been contemplating the price of grains and oil and minerals...
the necessary ingredients for human survival or development. I had been delving into the bowels and arcana of commodities trading, the data regarding supply and demand, the yin/yang of commerce.

And, then, Rebecca offered her thoughts...and a photograph. The caption beneath that gut-wrenching image of a starving child and hopeful vulture tore through my heart and reduced me to tears.
The caption reads:

“The picture depicts a famine stricken child crawling towards a United Nations food camp, located a kilometer away.

The vulture is waiting for the child to die so that it can eat it. The picture shocked the whole world. No one knows what happened to the child, including the photographer Kevin Carter who left the place as soon as the photograph was taken.

Three months later he committed suicide due to depression”

I read the news today, oh boy. I’ve learned that the soaring prices of grains are fueling famine around the world. Famine’s nothing new. We’ve seen famine strike after years of drought. We’ve seen the horrors of famine inflicted as a weapon of war. Famine’s shadowed humanity throughout all of recorded history. Its skeletal hand has touched many.

Today, as I sit at my computer, window open wide, sunlight and breezes dancing all around, I know that people are starving. Young children, as young and innocent as that Sudanese child, are starving to death...suffering an extraordinarily painful demise.

Now, what if I told you...what if you knew?...that there is enough wheat in the United States, right now, in storage, to feed every man, woman, and child all the bread, pasta, and baked goods they can eat for the next two years - about 1.3 billion bushels. Yet wheat has soared in price...

While children are starving...while vultures wait.

Yes, in fact, wheat and corn and rice and all the grains essential for human survival in every nation, village and primitive hut across the globe are available, right now...in storage...beyond the reach of the impoverished and desperate.

And children starve...and vultures thrive.

We, we humans, have starved our fellow homo sapiens in horrific acts of war or crazed despotism. We, we humans, suffer when the rains disappear, loam turns to dust, and the sun mercilessly flogs each desperate sprout to death. We’ve been horrified. We’ve tried to help. We’ve cried out in anger and shame about fate and wars and the damage done...and all the suffering....the ineffable suffering.

But this is something new.

This time, “institutional investors” via large commodity index funds, are inflating the price of foodstuffs. Who are these institutional investors? Well, they’re Corporate and Government Pension Funds, Sovereign Wealth Funds, University Endowments and "hedge" funds. These “investors” now account for the largest share of outstanding commodities futures contracts, far outspending any other market participants. These “investors” are greedy speculators. These “investors” have absolutely no desire to actually purchase a single bushel of wheat or bag of rice. These “investors” step in between the producers and the consumers and simply bid the prices higher...in order to profit...

While children starve...and vultures salivate.

This is something new. There was always a valid reason for commodities futures trading and “hedging” (by the way, several hedge fund managers 'broke through' the billion dollar annual compensation 'barrier' last year). These practices once served to protect both producers (farmers) and customers (grocers) from the vicissitudes of Nature and Fate. The commodities futures “industry” has grown over the years, to be sure. At the end of 2003, $13 billion flowed into commodity index funds. Then, something truly ugly happened. “Institutional investors” those same institutions that had lost so much by gambling so recklessly with subprime mortgages and all of the resulting “innovative” financial instruments that proved to be...well...so reckless and worthless, decided they had to shore up their losses by investing/speculating in the commodities markets. By March of this year, the dollars “invested” had grown twenty times, to $260 billion. And the price of oil quintupled...and corn and soybeans and wheat and rice became too expensive for purchase by the poor.

And children starve...and vultures feast.

About a billion more dollars flow into commodity index funds each and every day. Each new dollar pushes the price of a grain of rice, an ear of corn and a kernel of wheat just a little bit higher...just a little bit farther from the reach of the pleading, struggling, desperate hand of the starving child...while the vultures patiently wait.

* * *

I’ve done well as an investor. I have. I’ve learned a bit and prospered a bit. But today, as the sunlight dapples my shoulder and the breezes frolic with my hair, I sit at my computer...crying...fighting with every ounce of strength I can muster to keep from screaming...to keep from reaching for the razor in the drawer...

* * *

12 Comments:

Blogger Cheesy said...

VERY POWERFUL POST MY FRIEND..
Please keep the razor at bay because due to your voice I am the wiser. I will passing this link along to some of my friends and their friends etc. This is an outrage and people need to be eduacted and voices need to be risen!

Sat May 31, 09:44:00 PM  
Anonymous Anonymous said...

Jonas, I truly know why I enjoy reading your ramblings. Great constuction and points well made. This was not the way I expected to start a new month but thanks for the perspective.

Stihl

Sun Jun 01, 05:26:00 AM  
Blogger rebecca said...

Jonas -

First let me thank you for that kind introduction...wow...it was unexpected my friend!

And thank you for writing on the financial investment aspect of it. Your repetitive statement -- while the vultures wait, thrive, salivate, and feast -- is the perfect symbolism needed here to bring it home. Your post not only spoke of the vulture waiting for its meal, but of our own vultures dressed in skins of human form.

I will be forwarding this to family and friends so that they can also become just a bit more informed, as I just have.

Thank you for this Jonas....this was an excellent and timely post and I am happy that mine proved to be the impetus. From my thought to yours and from yours to others....that is how each of us, individually, can begin effecting change.

Best,
Rebecca

Sun Jun 01, 07:23:00 AM  
Blogger paisley said...

i just want to add a point of research here,, are you aware that gores carbon credits trading fiasco is furthering the amount of crops that are inedible that farmers are being paid to plant in lieu of foodstuffs so that they an earn credits and sell them for absorbent dollar amounts in the commodity like carbon trading market so that they can further pollute our atmosphere guilt free??? look into it,, you will be appalled by what you find is really going on in that multi-billion dollar a year trading platform...

i wish some of these non-carbon, footprinting individuals would spend an afternoon reading up on what they are looking down at me for not supporting,,, but i guess the view is just not that good from "up there"......

end of rant... this was a heart wrenching piece,, as was rebeccas,, and knowing that we have the food and the ability to produce even more is infuriating.....

Sun Jun 01, 07:44:00 AM  
Blogger Jay said...

Very true Jonas.

I heard a quote recently from a freegan (look it up). He said "It says a lot about our society when you can be picky about what trash you take."

I have yet to take the step into freeganism, but it has sparked my curiosity.

Sun Jun 01, 08:24:00 AM  
Blogger Scott from Oregon said...

With markets inflated as they are, who reaps? When does the bubble burst?

You can't just inflate something and expect it to hold its value.

Who is keeping the bubble from bursting?

Sun Jun 01, 08:05:00 PM  
Blogger 1L said...

Why Jon, why? Wjy do every time I stop over here to check on a dear friend, do you make me think so much? Why?

(And thanks) Peace out.

Sun Jun 01, 09:11:00 PM  
Anonymous Selma said...

I read Rebecca's post last night and felt numb until morning when I got in the shower and screamed and cried. I'm sure the neighbours must have thought I was being attacked. I cannot bear the world at times. I cannot bear how we worship the dollar, how we let little children like that suffer. I am ashamed. I knew we had a glut of food stashed somewhere but I didn't really have the facts at my disposal. This is criminal. The worst thing about it is how disposable the investors and administrators of these funds think people in places like Africa are. It is inhumane in the extreme. Please tell me we can change it, Jonas, because today, right now, I feel powerless. I am starting to believe that greed always wins in the end. We need a revolution, but where do we start?

Mon Jun 02, 04:27:00 AM  
Blogger shadowlands6822 said...

Dear Jonas,
Please leave the razor in the drawer and lend your voice and your wordsmithing to this cause. I didn't know about the speculators. The average person doesn't understand why everything is rising in cost. Nor do they know that the grains are being speculated. Your knowledge of the markets help put a human face on this atrocity...
My husband said that it reminds him of the discovery of the "death camps". The world failed to realize that this kind of evil existed. So, it is with this horrible situation. Information and someone with your ability to information...You and Rebecca give a voice to that starving child. Thank you for raising my awareness. Even though I have nothing much to offer, I can go to these sites and know that the time I spend there will feed children and hopefully deny a meal to a lurking vulture....

Mon Jun 02, 09:52:00 PM  
Blogger Jonas said...

It does my heart good to be in the company of good hearts. It truly does.

Yes, Ms. Cheese, we need to raise our voices high and effen blow the lid off these destructive speculative practices. Some of what I've learned has come from testimony presented to House and Senate subcommittess that have been investigating the reasons behind the quintupling of oil prices. In recent days, the Commodities Futures Trading Commission (CFTC) has announced that it is considering rules changes that would require greater "transparency" within this shadowy world. One hour after the CFTC announced its intentions, the price of oil dropped 5% (I guess a few institutions would prefer to remain anonymous...). Please write to your elected representatives and demand that rank speculation be eliminated from the commodities markets. The dire impacts to society from these practices must not be allowed to continue.

Thanks, Stihl, for dropping by, and all your kind words. You're always welcome here, my friend!

Yes, Rebecca...one voice...plus another...and another...can change the world. I truly do believe that.

You may not know this, Ms. Paisley, but I've spent my entire career in the environmental arena (cleaning up hazardous wastes, mostly). I'm well aware of the Global Warming debates, both the science and the economics.

The voluntary "carbon offsets" programs ARE window dressing, I agree. Regulatory and international treaty compliance will be necessary.

The use of corn for fuel was not inspired by carbon offsets. Rather, it is yet another shameful aspect of billion-dollar taxpayer subsidies to major corn growers. Trust me on this.

Hello, Jay! I've been following your thoughts regarding food, cruelty to animals and vegetarianism. I applaud you for your ideals. Keep on truckin', son!

Valid question, Scott. The commodities futures markets differ from stock markets in that commodity futures are contracts to deliver a specified quantity of a commodity by a specific date. The "futures" run well into the future. The "suppliers" enter into these contracts in order to be paid for their goods. The "customers" enter into these contracts because they need the goods by a certain date. What's happening, now, is that "speculators" are creating an artificial demand. The speculators always sell their contracts before the contract due date to actual customers (after all, what's a Wall Street trader gonna do with a tanker full of oil, or a 1,000 bushels of wheat?). Sadly, though, the contract will have changed hands many times before the due date, each sale bumping the price a little higher. The final sale to the actual customer will reflect the higher accrued contract price. In the end, high commodities prices will lead to "demand destruction", we'll buy more fuel-efficient cars, delay or kill construction projects, etc. However, the "demand destruction" resulting from high food prices only comes once the vultures have gorged...

Hello, 1L...oh, come now...you pondercate because you are a thinking person...my words don't mean much of anything at all to someone who does not care. Stop by more often, you're always welcome!

Spread the awareness, Selma! Here in the U.S., we can turn the spotlight on, scream bloody murder and vote for change. But the rank speculation is speading around the world. The London Market is heavily involved. Dubai has announced an intent to create new trading markets. The US is a critically important market, to be sure...but the greed is spreading like a cancer.

Raise your voice, Ms. Shadowlands! Write to your representatives and complain. The beauty and the promise of our democracy is that people can effect change (though it seems so hopeless, most times).

Finally, I just wanted to note that today marks the first day of a three-day UN conference on the International Food Crisis. There's no time left to waste. If my words can inspire you to do something...anything...do it now!

Tue Jun 03, 10:58:00 AM  
Anonymous Anonymous said...

The problems of the world keep me up at night. Famine is a horror and the resulting sickness and death make ME sick. I actually heard a farmer on the news a couple of weeks ago say (because he had stopped growing corn for eating and was harvesting it for the carbon market) that it was the farmers' turn to make money; that they had been "suffering" for years growing food for others and their farms and farm equipment were mortgaged up to the hilt. It's not the farmers so much as it is the distributors, the government taxes and, yes, the gluttons and greedy ones. Even when we try to distribute it to the third world countries, their governments, rife with corruption, sell it on the black market instead of getting it to where it is most needed. I wonder about the charity orgs who try so hard to get it where it's needed and how they are stopped by thieves and corrupted officials. How will it end?

Tue Jun 03, 12:07:00 PM  
Blogger Donn said...

It is obscene how those pencil necked little assholes just look at profit margins without considering the toll on others.

Avarice has hit a new high (LOW) in the conglomerate oligopolized global marketplace...the new breed of money marketeers are souless sonsofbitches who need to fuel their mortgaged lifestyles.

The gap between the rich and the poor is expanding to more historical proportions..well the myth of the American Dream was nicely managed when the media controlled most of the information..but 2 important things happened
now ordinary people can communicate out here and gain access to all sorts of data and
the 'news' media has been absorbed by huge corporations and thrown into the advertising department.

You would think that 30,000 children starving each day would have an effect on someone who is considering wasting $25,000 on a new watch but hey, that's over there.

When aid does get sent it is hijacked by corrupt governments and this adds to the apathy..and Westerners ask why aren't those people using birth control without considering the historical evidence that humans reproduce in higher numbers when infant mortality is so high.

The New World needs an enema.

Wed Jun 04, 08:11:00 AM  

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