Global Famine? Blame the Fed

The stakes couldn’t be higher for Ben Bernanke. If the Fed chief decides to lower rates at the end of April, he could be condemning millions of people to a death by starvation. The situation is that serious. Food riots have broken out across the globe destabilizing large parts of the developing world. China is experiencing double-digit inflation. Indonesia, Vietnam and India have imposed controls over rice exports. Wheat, corn and soya are at record highs and threatening to go higher still. Commodities are up across the board. The World Food Program is warning of widespread famine if the West doesn’t provide emergency humanitarian relief. Venezuelan President Hugo Chavez said it best:

“It is a massacre of the world’s poor. The problem is not the production of food. It is the economic, social and political model of the world. The capitalist model is in crisis.”

Right on, Hugo. There is no shortage of food; it’s just the prices that are making food unaffordable. Bernanke’s “weak dollar” policy has ignited a wave of speculation in commodities which is pushing prices into the stratosphere. The UN is calling the global food crisis a “silent tsunami”, but its more like a flood; the world is awash in increasingly worthless dollars that are making food and raw materials more expensive. Foreign central banks and investors presently hold $6 trillion in dollars and dollar-backed assets, so when the dollar starts to slide, the pain radiates through entire economies. This is especially true in countries where the currency is pegged to the dollar. That’s why most of the Gulf States are experiencing runaway inflation. This doesn’t mean that oil depletion, biofuel production, over-population, and giant agribusinesses don’t add to the problem. They do. But the catalyst is the Fed’s monetary policies; that’s the domino that puts the others in motion. Here’s Otto Spengler’s summary in his recent article:

The global food crisis is a monetary phenomenon, an unintended consequence of America’s attempt to inflate its way out of a market failure. There are long-term reasons for food prices to rise, but the unprecedented spike in grain prices during the past year stems from the weakness of the American dollar. Washington’s economic misery now threatens to become a geopolitical catastrophe… The link between the declining parity of the US unit and the rising price of commodities, including oil as well as rice and other wares, is indisputable.

Never before in history has hunger become a global threat in a period of plentiful harvests. Global rice production will hit a record of 423 million tons in the 2007-2008 crop year, enough to satisfy global demand. The trouble is that only 7% of the world’s rice supply is exported, because local demand is met by local production. Any significant increase in rice stockpiles cuts deeply into available supply for export, leading to a spike in prices. Because such a small proportion of the global rice supply trades, the monetary shock from the weak dollar was sufficient to more than double its price.1

The US is exporting its inflation by cheapening its currency. Now a field worker in Haiti who earns $2 a day, and spends all of that to feed his family, has to earn twice that amount or eat half as much. No wonder that six people were killed Port au Prince in the recent food riots. People go crazy when they can’t feed their kids.

Food and energy prices are sucking the life out of the global economy. Foreign banks and pension funds are trying to protect their investments by diverting dollars into things that will retain their value. That’s why oil is nudging $120 per barrel when it should be in the $70 to $80 range.

According to Tim Evans, energy analyst at Citigroup in New York, “There’s no supply-demand deficit”. None. In fact suppliers are expecting an oil surplus by the end of this year.

The case for lower oil prices is straightforward: The prospect of a deep U.S. recession or even a marked period of slower economic growth in the world’s top energy consumer making a dent in energy consumption. Year to date, oil demand in the U.S. is down 1.9% compared with the same period in 2007, and high prices and a weak economy should knock down U.S. oil consumption by 90,000 barrels a day this year, according to the federal Energy Information Administration.2

There’s no oil shortage; that’s another ruse. Speculators are simply driving up the price of oil to hedge their bets on the falling dollar. What else can they do; put them in the frozen bond market, or the sinking stock market, or the collapsing housing market? The Fed has gummed up the entire financial system with its low-interest credit scam; now it’s on to commodities where the real pain is just beginning to be felt.

This is what happens when there’s too many dollars sloshing around the system; they all need a place to rest, and when they do, they create equity bubbles. Sound familiar? Indeed. This is Greenspan’s legacy in a nutshell; the dark specter of Maestro will continue to haunt the world until all the hyper-inflated asset-classes (real estate, bonds, stocks, commodities) return to earth and all the red ink is mopped up. That’ll take time, but Bernanke could make things a lot easier if he accepted some responsibility for the current turmoil and raised rates by 25 basis points. That would show speculators that the Fed was serious about defending the currency which would send the commodities bubble crashing to earth. Prices would go down overnight.

But Bernanke won’t raise rates because he doesn’t really give a hoot about the people in Cameroon who have to scavenge through garbage-dumps for a few morsels to keep their families alive. Nor does he care about the average American working-stiff who gets cardiac-arrest every time he pulls up to the gas pump. What matters to Bernanke is making sure that his fat-cat buddies in the banking establishment get a steady stream of low interest loot so they can paper-over their bad investments and ward off bankruptcy for another day or two. Its a joke; it was the investment banks that created this mess with their putrid mortgage-backed securities and other debt-exotica. Still, in Bernanke’s mind, they are the only ones who really count.

And don’t expect Bush to step in and save the day either. The “Decider” still believes in the unrestricted activity of the free market; especially when his crooked friends can make a buck on the deal.

From the Washington Times:

Farmers and food executives appealed fruitlessly to federal officials yesterday for regulatory steps to limit speculative buying that is helping to drive food prices higher. Meanwhile, some Americans are stocking up on staples such as rice, flour and oil in anticipation of high prices and shortages spreading from overseas. Costco and other grocery stores in California reported a run on rice, which has forced them to set limits on how many sacks of rice each customer can buy. Filipinos in Canada are scooping up all the rice they can find and shipping it to relatives in the Philippines, which is suffering a severe shortage that is leaving many people hungry.3

The Bush administration knows there’s hanky-panky going on, but they just look the other way. It’s Enron all over again–where Ken Lay Inc. scalped the public with utter impunity while regulators sat on the sidelines applauding. Great. Now its the Commodity Futures Trading Commission (CFTC) turn; they’re taking a hands-off approach so Wall Street sharpies make a fortune jacking up the price of everything from soda crackers to toilet bowls.

A hearing Tuesday in Washington before the Commodity Futures Trading Commission starts a new round of scrutiny into the popularity of agricultural futures, a once a quieter arena that for years was dominated largely by big producers and consumers of crops and their banks trying to manage price risks. The commission’s official stance and that of many of the exchanges, however, is likely to disappoint many consumer groups. The CFTC’s economist plans to state at the hearing that the agency doesn’t believe financial investors are driving up grain prices. Some grain buyers say speculators’ big bets on relatively small grain exchanges, especially recently, are pushing up prices for ordinary consumers.4

“The agency doesn’t believe financial investors are driving up grain prices”?!?

Prices have doubled, people are starving, and the Bush troop is still parroting the same worn party-mantra. Its maddening.

The US has been gaming the system for decades; sucking up two-thirds of the world’s capital to expand its cache of Cadillac Escalades and flat-screen TVs; giving nothing back in return except mortgage-backed junk, cluster bombs, and crummy green paper. Nothing changes; it only gets worse. But this time its different. The world is now facing the very real prospect of famine on a massive scale because twelve doddering old banksters at the Federal Reserve would rather bailout their sketchy friends then save the lives of starving women and children. Bernanke now has an opportunity to send more people to their eternal reward than Bush with one swipe of the pen. If he cut rates; the dollar will fall, commodities will spike, and people will starve. It’s as simple as that.

  1. Rice, Death and the Dollar,” Otto Spengler, Asia Times. []
  2. “Bears Baffled by Oil Highs” Gregory Meyer, Wall Street Journal. []
  3. Patrice Hill, Washington Times. []
  4. “Call Goes Out to Rein In Grain Speculators,” Ann Davis, Wall Street Journal. []

Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com. Read other articles by Mike.

15 comments on this article so far ...

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  1. evie said on April 28th, 2008 at 8:23am #

    There is no global food shortage.

    The price of food is a manipulated market but also being driven up by a huge growing middle class in developing nations, China, India, and others.

    As for the wisdom of Hugo – if oil returned to $22/barrel his Venezuelan socialist model would be in crisis as he constructed it on oil profits – he would flee to Miami or Madrid as the poor of Caracas overrun the palace.

    Of course the UN WFP is the first to scream warnings “… of widespread famine if the West doesn’t provide emergency humanitarian relief.” In a nutshell, mo’ money please, here they come to save the day…. Save the Children, Feed the Poor. Ca-ching, Ca-ching.

  2. corylus said on April 28th, 2008 at 10:01am #

    Farm Bill to the rescue! This perverse legislation will subsidize the cultivation of fragile ecosystems in the Plains for more grain to feed….mouths? No, the guzzling gas tanks of Amerika’s fossil fueled greed and the pockets of its corporate Shylocks. The canary is in Africa, where the poor are already starving as governments sell grain to feed the ethanol habit. Time to revert to hunting and gathering, and eating, the rich. Make mine a side flank of Chevron CEO, please.

  3. maha said on April 28th, 2008 at 10:52am #

    Well, at the heart of the problem is world bank and IMF trade and agricultural policy which for decades has striven to destroy many nations’ means of self sufficiency making them dependent with the promise all will be well, and putting control in the hands of a few huge corporations. (Also should mention western military interventions and invasions which have turned self sufficient nations and food exporters (such as Iraq) into starving nations.) I cannot see this is a coincidence, it has totally been calculated to arrive at this point. From capitalism into feudalism. Depopulation is policy. And meanwhile the brainwashed westerner is fed propaganda of too many people on the planet and blame it on the Chinese and Indians (or the black or brown people), so they can parrot it like morons and not feel too bad about those starving or being annihilated, there’s too many of them after all.

  4. Shabnam said on April 28th, 2008 at 12:43pm #

    Maha thank you for your comment. I am surprised to see the citizen of the “world leader” so ignorant that are not able to understand how their own fuc….. System, MODERN SLAVERY, does work yet they dare to force it upon others. The western imperialism has gone practically to every single corner of the planet and colonized, killed, robbed and raped the indigenous population to force their broken economic system on these countries, consumerism, to create indigenous collaborators, the elites, to support the US government, as George Bush call it, to kill any dissident might arise against the MODERN SLAVERY system but these ignorant citizens do not know how the fuc…. system works. These ignorant citizens blame the population growth of “others” a “threat” like Thomas Malthus and present it as the reason to justify their full cooperation with the government, active or passive, in annihilation and obliteration of “others” such as Indian, Iraqi, Afghani and in the near future probably Iranian to maximize their benefits.
    We have to be united against this ignorant population worldwide who are responsible for massacre of Iraqi, Afghani, African, Asian and many more, during the short history of this hegemonic power where it has caused the biggest destruction of the planet compare to civilizations of 8000 years and more.

  5. Tommy said on April 28th, 2008 at 7:19pm #

    We bear witness to the collapse of capitalism, the remaining obsolete command-and-control ideology.

    We humans would do ourselves and the future a huge good turn if we adopted ecological worldviews to evolve us out of the reductionist science paradigm and into the ecological paradigm, thus facilitating a return to the Garden where we belong, as Permaculture teaches.

    Economics removed from ecology is an obsolete tool arising from reductionist science, a tool now abundantly discredited.

    We can not move forward with information gathered from a fragmented worldview. We can only repeat mistakes.

    “The Way,” by Edward Goldsmith, teaches the ecological worldview.

  6. Lloyd Rowsey said on April 28th, 2008 at 9:04pm #

    Some while ago in DV, I posted materials regarding the idiocy of thinking economics professors were mathematicians, and thinking economics was non-normative and scientific. There is a wonderful interview in the current NYR online, with Judy Woodruff and George Soros, regarding the current financial crisis:

    The Financial Crisis: An Interview with George Soros
    By George Soros, Judy Woodruff

    The following is an edited and expanded version of an interview with George Soros, Chairman, Soros Fund Management, by Judy Woodruff on Bloomberg TV on April 4.

    Judy Woodruff: You write in your new book, The New Paradigm for Financial Markets,[1] that “we are in the midst of a financial crisis the likes of which we haven’t seen since the Great Depression.” Was this crisis avoidable?

    George Soros: I think it was, but it would have required recognition that the system, as it currently operates, is built on false premises. Unfortunately, we have an idea of market fundamentalism, which is now the dominant ideology, holding that markets are self-correcting; and this is false because it’s generally the intervention of the authorities that saves the markets when they get into trouble. Since 1980, we have had about five or six crises: the international banking crisis in 1982, the bankruptcy of Continental Illinois in 1984, and the failure of Long-Term Capital Management in 1998, to name only three.

    Each time, it’s the authorities that bail out the market, or organize companies to do so. So the regulators have precedents they should be aware of. But somehow this idea that markets tend to equilibrium and that deviations are random has gained acceptance and all of these fancy instruments for investment have been built on them.

    There are now, for example, complex forms of investment such as credit-default swaps that make it possible for investors to bet on the possibility that companies will default on repaying loans. Such bets on credit defaults now make up a $45 trillion market that is entirely unregulated. It amounts to more than five times the total of the US government bond market. The large potential risks of such investments are not being acknowledged.

    Woodruff: How can so many smart people not realize this?

    Soros: In my new book I put forward a general theory of reflexivity, emphasizing how important misconceptions are in shaping history. So it’s not really unusual; it’s just that we don’t recognize the misconceptions.

    Woodruff: Who could have? You said it would have been avoidable if people had understood what’s wrong with the current system. Who should have recognized that?

    Soros: The authorities, the regulators—the Federal Reserve and the Treasury—really failed to see what was happening. One Fed governor, Edward Gramlich, warned of a coming crisis in subprime mortgages in a speech published in 2004 and a book published in 2007, among other statements. So a number of people could see it coming. And somehow, the authorities didn’t want to see it coming. So it came as a surprise.

    Woodruff: The chairman of the Fed, Mr. Bernanke? His predecessor, Mr. Greenspan?

    Soros: All of the above. But I don’t hold them personally responsible because you have a whole establishment involved. The economics profession has developed theories of “random walks” and “rational expectations” that are supposed to account for market movements. That’s what you learn in college. Now, when you come into the market, you tend to forget it because you realize that that’s not how the markets work. But nevertheless, it’s in some way the basis of your thinking.

    Woodruff: How much worse do you anticipate things will get?

    Soros: Well, you see, as my theory argues, you can’t make any unconditional predictions because it very much depends on how the authorities are going to respond now to the situation. But the situation is definitely much worse than is currently recognized. You have had a general disruption of the financial markets, much more pervasive than any we have had so far. And on top of it, you have the housing crisis, which is likely to get a lot worse than currently anticipated because markets do overshoot. They overshot on the upside and now they are going to overshoot on the downside.

    Woodruff: You say the housing crisis is going to get much worse. Do you anticipate something like the government setting up an agency or a trust corporation to buy these mortgages?

    Soros: I’m sure that it will be necessary to arrest the decline because the decline, I think, will be much faster and much deeper than currently anticipated. In February, the rate of decline in housing prices was 25 percent per annum, so it’s accelerating. Now, foreclosures are going to add to the supply of housing a very large number of properties because the annual rate of new houses built is about 600,000. There are about six million subprime mortgages outstanding, 40 percent of which will likely go into default in the next two years. And then you have the adjustable-rate mortgages and other flexible loans.

    Problems with such adjustable-rate mortgages are going to be of about the same magnitude as with subprime mortgages. So you’ll have maybe five million more defaults facing you over the next several years. Now, it takes time before a foreclosure actually is completed. So right now you have perhaps no more than 10,000 to 20,000 houses coming into the supply on the market. But that’s going to build up. So the idea that somehow in the second half of this year the economy is going to improve I find totally unbelievable.

    Woodruff: So how long will this last?

    Soros: Well, it depends on when the authorities wake up, because you need to reduce the number of foreclosures. You need to keep as many people as possible in their houses so that they don’t come onto the market. You need to arrest the decline in house prices, but you also need to prevent human suffering and social disruption because it’s going to be very, very severe. Certain communities are already hurting and it’s going to get a lot worse. So action will have to be taken, but I don’t think it’s going to happen during this administration.

    Woodruff: You said the Federal Reserve had to step in to engineer the buyout by J.P. Morgan of Bear Stearns to prevent a much bigger catastrophe. You’ve also said that to do this, the Fed had to take on considerable risk. Is this an unhealthy amount of risk that the Fed has taken on?

    Soros: This is their job, whether unhealthy or not; I don’t think it’s actually so severe. But that is their job, to save the system when it is in danger. However, because that is their job, it ought to be their job also to prevent asset bubbles from developing. And that task has not been recognized. Greenspan once spoke about the “irrational exuberance” of the market. It had a bad echo and he stopped talking about it. And it’s generally accepted that the Fed tries to control core inflation, but not asset prices. I think that control of asset prices has to be an objective in order to prevent asset bubbles because they are so frequent.

    Woodruff: And that’s more than what the Fed is doing.

    Soros: It’s more than what it’s doing now. You have to recognize that just controlling money doesn’t control credit. You see, money and credit don’t go hand in hand. The monetarist doctrine doesn’t stand up. So you have to take into account the willingness to lend. And if it’s too great—if borrowers can obtain large loans on the basis of inadequate security—you really have to introduce margin requirements for such borrowing and try to discourage it.

    Woodruff: When you talk about currency you have more than a little expertise. You were described as the man who broke the Bank of England back in the 1990s. But what is your sense of where the dollar is going? We’ve seen it declining. Do you think the central banks are going to have to step in?

    Soros: Well, we are close to a tipping point where, in my view, the willingness of banks and countries to hold dollars is definitely impaired. But there is no suitable alternative so central banks are diversifying into other currencies; but there is a general flight from these currencies. So the countries with big surpluses—Abu Dhabi, China, Norway, and Saudi Arabia, for example—have all set up sovereign wealth funds, state-owned investment funds held by central banks that aim to diversify their assets from monetary assets to real assets. That’s one of the major developments currently and those sovereign wealth funds are growing. They’re already equal in size to all of the hedge funds in the world combined. Of course, they don’t use their capital as intensively as hedge funds, but they are going to grow to about five times the size of hedge funds in the next twenty years.

    Woodruff: How low do you think the dollar will go?

    Soros: Well, that I don’t know. I can see the trend, but I don’t know its extent, and I don’t know when something might happen to turn it around. Once the economy stabilizes, probably the overshoot on the currencies would also be corrected.

    Woodruff: Few people know more about hedge funds than you do. You’ve been enormously successful with your own hedge fund. Should hedge funds be more regulated by Washington?

    Soros: I think hedge funds should be regulated like everything else. In other words, you have to control leverage—credit obtained for investment purposes—somewhere. Excessive use of leverage is at the bottom of this problem. And there have been hedge funds that have been using leverage excessively and some of those have gone broke. The amount of leverage that people are allowed to use has to be regulated. I think it’s best done through the banks. In other words, the banks’ reserve requirements—the amounts of money they are obliged to hold—should be tailored to the riskiness of their customers. So investment funds that use a lot of leverage ought to be seen as very risky; and therefore they would not get the amount of leverage they seek because the banks wouldn’t give it to them.

    Woodruff: New regulation, though: Could that impede the ability of hedge funds to be the big players that they have been in these markets?

    Soros: Yes, I think that there has been excessive use of credit and it does have to be limited. So we are now in a period of very rapid deleveraging and I think that in the future we ought not to allow leverage to be used to the extent that it has been in the past.

    Woodruff: You write, “We are at the end of an era.” When this current credit crisis ends, will the US still be, no doubt about it, the world superpower when it comes to the economy?

    Soros: Not at all. This is now in question. And you now have entered a period of really considerable uncertainty and turmoil because of the general flight from currencies, which manifests itself in the commodities bubble that has developed. The price of gold hasn’t yet gone as high as it might. So what comes out of this turmoil is very open to question. I think that you will have to somehow reconstruct the global financial architecture because you have recognized that, in effect, the economic weight has changed considerably among the different countries. China has become much more important and also India, and so on. What kind of system will evolve from this is, I think, a very open question.

    Woodruff: What about China? How much of an economic competitor could it end up being?

    Soros: Well, China is rising. It’s been the main beneficiary of globalization. Their currency is significantly undervalued and for various reasons they have to allow it to appreciate, recently at a rate of 10 percent. And it’s been accelerating now to 15, 20 percent, which makes the situation more difficult for the Fed because you now have the prospect of core inflation in the US accelerating because if our imports coming from China go up in price by 15 percent, it will come through in core inflation. The price of goods at Wal-Mart is rising and will probably continue to rise and then accelerate.

    Woodruff: So while people are thinking that goods are cheaper from China, you’re saying the prices go up. It affects so many things that we buy in this country. What of Russia and how its economy is doing?

    Soros: Basically, the country is benefiting from the high price of oil, but, at the same time, it is reestablishing a very authoritarian regime where the rights of investors are not respected. Now it is British Petroleum that is being chased out. So you invest at your own risk. I’ve done it and I’m not going to do it again.

    Woodruff: So what you see in Russia tells us that political freedom and economic freedom are separable after all?

    Soros: Well, the lack of political freedom also impinges on the rights of shareholders. So it’s not a suitable area for investing exactly because you don’t have the rule of law. China is improving a great deal. The rule of law is getting stronger in China, even though you don’t have democracy.

    Woodruff: The most attractive emerging market?

    Soros: At this time, the outlook for India is also very good.

    Woodruff: Let me mention two other points because they are so much on the minds of our leaders today. One is fighting the war on terror. Should the next president be prepared to sit down with the leaders of organizations like Hamas, like Hezbollah, countries like Iran?

    Soros: Absolutely. I wrote another book arguing that the entire idea of a “war on terror” is a misleading concept that has got this country off on the wrong track.[2] It is responsible for our invading Iraq under the wrong pretenses and for a decline of our political influence and military power that has no precedent.

    Woodruff: Where do you see the “war on terror” ten years down the road?

    Soros: I hope that we will put it behind us. If you think in terms of human security and you say that the role of governments is to make the people secure, then it leads you to a completely different line of action. And even in Iraq, the surge, which was quite successful militarily, tried to provide protection for civilians, instead of just chasing terrorists whom we couldn’t find after breaking into houses and terrifying the people. Concern for human security, making us feel safe and making the people in other countries feel safe: I think that would get you to a totally different line of action.

    Woodruff: Bringing us back to this country in the midst of this economic credit crisis that you write about and that you’ve been describing, we are also in the middle of a presidential election. You endorsed Barack Obama the day he announced. Why him rather than your home state senator, Senator Clinton?

    Soros: Well, I have very high regard for Hillary Clinton, but I think Obama has the charisma and the vision to radically reorient America in the world. And that is what we need because I’m afraid we have gotten off the right track and we need to have a greater discontinuity than Hillary Clinton would bring.

    Woodruff: You have no concern that he lacks the experience to lead in this dangerous time that we live in?

    Soros: I think that he has shown himself to be a really unusual person. And I think this emphasis on experience is way overdone because he will have exactly the same advisers available as Hillary Clinton, and it will be a matter of judgment whom he chooses. And actually, he is more likely to bring in new blood, which is what we need.

    Woodruff: Recently, Senator Obama has endorsed some of the things we’ve been talking about: greater financial regulation, having for example the Federal Housing Administration insure unaffordable mortgages against default. Do you think this goes far enough, what he’s talking about? Did he talk with you at all?

    Soros: No, I’ve had absolutely no contact with him or any of the Democratic leadership on this issue. Now that my book is out, maybe I will in the future. But these are my ideas and they are not responsible for them.

    Woodruff: From what you know about what he’s saying about the housing crisis, do you think he goes far enough?

    Soros: No, nothing right now goes far enough and Representative Barney Frank, who really understands the issues, is not pushing that far because, in order to get bipartisan support, you can’t. So if you want something done, you have to set your sights lower. And that is what he has done and I think he is getting a few things through. But they are not enough.

    Woodruff: A larger question on the campaign—you gave, I believe, something like $23 million in 2004 to various Democratic efforts: MoveOn.org and candidates. Far less than that so far this year—why the change?

    Soros: Well, because I think that was a unique time when not having President Bush reelected would have made the situation of this country and of the world much better. I think now it’s less important. And, in any case, I don’t feel terribly comfortable being a partisan person because I look forward to being critical of the next Democratic administration.

    Woodruff: What of your book and the philosophy that comes of it?

    Soros: In human affairs, as distinguished from natural science, I argue that our understanding is imperfect. And our imperfect understanding introduces an element of uncertainty that’s not there in natural phenomena. So therefore you can’t predict human affairs in the same way as you can natural phenomena. And we have to come to terms with the implication of our own misunderstandings, that it’s very hard to make decisions when you know you may be wrong. You have to learn to recognize that we in fact may be wrong. And, even worse than that, it’s almost inevitable that all of our constructs will have some kind of a flaw in them. So when it comes to currencies, no currency system is perfect.

    So you have to recognize that all of our constructions are imperfect. We have to improve them. But just because something is imperfect, the opposite is not perfect. So because of the failures of socialism, communism, we have come to believe in market fundamentalism, that markets are perfect; everything will be taken care of by markets. And markets are not perfect. And this time we have to recognize that, because we are facing a very serious economic disruption.

    Now, we should not go back to a very highly regulated economy because the regulators are imperfect. They’re only human and what is worse, they are bureaucratic. So you have to find the right kind of balance between allowing the markets to do their work, while recognizing that they are imperfect. You need authorities that keep the market under scrutiny and some degree of control. That’s the message that I’m trying to get across.

  7. AaronG said on April 28th, 2008 at 9:29pm #

    With food staples rising, I would like to know what’s happening to luxury items like caviar and wine etc. My (unresearched) bet is that they’re not taking as much of a hit as rice, corn grain etc

    Sounds like the black horse of famine is riding through the earth at the moment, ridden by the anglo-american empire……. “And when he opened the third seal, I heard the third living creature say: “Come!” And I saw, and, look! a black horse; and the one seated upon it had a pair of scales in his hand. And I heard a voice as if in the midst of the four living creatures say: “A quart of wheat for a de·nar´i·us, and three quarts of barley for a de·nar´i·us; and do not harm the olive oil and the wine.” Rev 6:5,6

    There’s something seriously wrong with the food production system when my uncle grows wheat, then buries it a hole in the ground, waiting for the price to rise.

  8. maha said on April 28th, 2008 at 10:21pm #

    Soros sells us the old lie of oh the authorities are just a bit dizzy and keep making cock-up –as if the authorities have anything to do with policy, what a joke. The cock-up theory seems to be a universal excuse (=LIE) used by western governments, and believed by idiots.

  9. Lloyd Rowsey said on April 28th, 2008 at 11:07pm #

    none is so blind as him who will not see

  10. Don Hawkins said on April 29th, 2008 at 7:56am #

    14 billion in three months for big oil.

  11. Don Hawkins said on April 29th, 2008 at 8:14am #

    Go to this web site and read Tipping points: perspective of a climatologist . http://www.columbia.edu/~jeh1/ it’s new James Hansen

  12. Don Hawkins said on April 29th, 2008 at 8:20am #

    Go to James Hansen’s web site and read his new stuff. Tipping points: perspectives of a climatologist.

  13. jomama said on April 29th, 2008 at 9:08am #

    The so-called “free market” is about as free as a ball & chain on a
    quadriplegic.

    Socialism for the rich, courtesy of the Fed.

    http://research.stlouisfed.org/fred2/series/BORROW?rid=19

    Don’t let the word “borrowings” fool you.

  14. maha said on April 29th, 2008 at 4:38pm #

    Lloyd, are you aware of Soros’ background?
    http://wiki.zmag.org/George_Soros
    He’s indeed a very good shepherd.

    What’s happening is obvious,
    http://mrzine.monthlyreview.org/grain260408.html

  15. Lori Hoffman said on May 1st, 2008 at 3:15pm #

    I would like to know where I can buy seeds that can be reused year after year? I want to make my own supply of food, for storage. Growing a garden, is part of having my own supply. I also have an oven to dry my foods. Thank you for taking time to read this message!
    Sincerely, Lori Hoffman