How Goldman Sachs caused the collapse of the world food market

July 19, 2010

(To increase the font of this essay – hold down the Ctrl key and keep on pressing +) I am sure all of you know how Goldman Sachs once sold poison to unsuspecting customers – while taking bets on the side that they were going to croak. Recently, they were let off with a smack on the wrist with a paltry $500 million fine from the SEC.

Has Goldman Sachs finally seen the light? Is it now well and truly on the way to reforming its miserable self?

It turns out peddling poison products just happens one of GS many trangressions – In these last few weeks investigations have revealed how Goldman Sachs along with a few traders may have caused the starvation of some of the poorest people in the world, just so they could make a quick buck.

The investigation starts like a Tom Clancy novel. Just at the beginning of 2007, food prices across the world started to rise for no apparent reason – at first these spikes were attributed to volatility in supply and demand. But as they kept going through the roof – it became evident to many, darker forces were at work – wheat rocketed by as much as 80 percent, maize by 95 percent, and rice by 370 percent – and cocoa nearly tripled in less than two months!

In that span of time when food prices rose stratospherically millions of people – mostly children – couldn’t afford to eat, and sank into malnutrition or starvation.

Then, in spring 2008, prices mysteriously fell back to their previous levels – by then of course whole entire swaths of continents had been ravaged.

But no one knew what had really happened – you see in the spring of 2008 / the financial meltdown was the further thing in the minds of most people / besides the idea of too big to fail had yet to be coined and the idea one firm like GS could just about cause untold misery on a global scale was the stuff of conspiracy theorist.

At first most economist attributed these food rises to oil prices going up across the whole world – they reason, this was the primary catalyst that drove the price of commodities upwards.

However, now we all know better – as increasingly the evidence shows that wasn’t the biggest factor for food spikes. The main reason why food prices shot up was because somewhere in the 1990’s – Goldman Sachs lobbied hard to abolish certain agricultural pricing standards which were specifically designed to keep out speculators and only ensure the buyers were people who were directly involved in the global food supply chain.

Because Goldman succeeded in rewriting the bible on how food prices should be set, traded and transacted – suddenly, the global food market was transformed into a casino – and these contracts which were previously only transacted between farming cooperatives and distribution centers were turned into mini stock markets that could buy and sell anything from Cocoa to Nutmeg.

A stockmarket for food was founded.

Question: how was GS involved in manipulating the global food market?

Before the world food market was turned into the S&P 500 or the Nasdaq, the price for food was relatively stable as it was determined largely by the forces of supply and demand for food itself. It wasn’t a perfect system by any means – but generally, the spikes and valleys were managable.

 But after GS decided to muck around the food market and rewrite the rules on how banana’s and cumin seeds were being priced and traded, it was no longer just a market in food. It became, at the same time, a market in contracts which in turn allowed traders to bet on futures i.e you could for example buy coffee positions in December 2010 in January 2010 by either betting for or against the market – and in this way what happened was the food market spiralled out of control – the speculators drove the price through the roof.

How this all happened still remains a matter of conjecture today. But the story goes like this – some two or three years before the sub-prime crisis ripped through the US, financial speculators like GS had long since pulled out of the market, and since they were sloshing in cash – they were looking to park their money in a place that could allow them to grow like one of Jack the Bean stalks. So they started to buy massive amounts of derivatives based on food: they reckoned that food prices would stay relatively stable while real estate melted away.

But what GS inadvertently did, when they parked all that hot money in one of the world’s most primitive stock exchange – the global food market – was it set into motion a terrible chain reaction. As the price of real estate and shares began to free fall in both the EU and US. Speculators throughout the world began to put their money in the food market as well  – which meant the price for food rose beyond the means of many. Hoarding started. Starvation was at pandemic levels. The global supply chain of food got really nutty – nutmeg for example went into a substitute for cocoa as Sumatran beans by that time had rose nearly 800% – and relatively unknown share crops that had been staples in some region of central Africa, like corn was bought up to tbe turned into bio fuel price – in a nutshell now the global food market was being set by traders sitting infront of some terminal in some skyscraper, thousands of miles away, rather than by farmers and local food merchants – and at the head of this narcomaniacal system was one evil organization called Goldman Sachs.

Darkness 2010

“In the digital age you cannot lie to anyone. It is impossible. Politicians and businessmen like to believe the public has a short memory. That may be true in the age of newspapers, radio and magazines – where people read very much with a presentist attitude – they never look back. But in the electronic age – there are links – and once you press on these portals, it opens up a door to the past – you can wander in this space – read even the comments of the people to sense what they may have once thought or felt about their objects of interest.

So these days, if you say people have short memories – you are in my opinion a man who has simply scaled the new battlefield wrongly. In truth, the internet has a memory as reliable as an elephant – so you must be very careful – things will come around. Trust me, they will come full circle whether you like it or not – as in life there will always be certain things that will hold out the promise of equality, the first is receeding hairlines and the other is the reaper will come for all men; and then we all know, the truth will always find a way to get out and sing like a bird…those who do not know this are not wise…not wise at all. 

They are like the mad sultan – Herodutus once wrote about…you know…the one who marched against the evil wind, the Africans call the Harmadan – so crazy was he, he even faced off with the red wind with war elephants and archers attired in full battle armor.

So it is the same here with those who think they are the sole purveyors of the truth and though they may be able to shut this down, close this up and twist that fellows arm etc…. to get their way; they are just fools – they are just buying time… at some point the truth will come in like a thief in the night and slit all their throats like assasins…..and no body will hear them scream in the night…not a soul.

So the moral of the story is make sure you are on the side of the truth my friends.”

Darkness 201o – recent conversation in Berlin to the IMG  & The Totenkopft Gamers Internationale- captured by an auto-bot crawler.

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