Thread: Getting Used to Life without Food and Death of Millions

Getting Used to Life without Food, Wall Street, BP, Bio-ethanol and Death of Millions

Commodities / Food Crisis Jul 03, 2011 - 05:10 AM
By: F_William_Engdahl

My late grandfather, a man of sturdy Norwegian-American farm stock, who later became a newspaper editor and political activist during the First World War, used to say, 'A man can get used to pretty much anything with time, except dying...and even that with some practice.' Well, as fate has it, it seems we, the vast majority of the human race, are about to test that adage in regard to the availability of our daily bread itself.

Food is one of those funny things it's hard to live without. We all tend to take it for granted that our local supermarket will continue to offer whatever we wish, in abundance, at affordable prices or nearly so. Yet living without adequate food is the growing prospect facing hundreds of millions, if not billions, of us over the coming years.



In a sense it's a genuine paradox. Our planet has everything we need to produce nutritious natural food to feed the entire world population many times over. This is the case, despite the ravages of industrialized agriculture over the past half century or more.

Then, how can it be that our world faces, according to some predictions, the prospect of a decade or more of famine on a global scale? The answer lies in the forces and interest groups that have decided to artificially create a scarcity of nutritious food. The problem has several important dimensions.

Eliminating emergency reserves

The ability to manipulate the price of essential foods worldwide at will -- almost irrespective of today’s physical supply and demand for grains -- is quite recent. It is also scarcely understood.

Up until the grain crisis of the mid-1970s there was no single "world price" for grain, the benchmark for the price of all foods and food products. Grain prices were determined locally in thousands of market places where buyer and seller met. The onset of economic globalization was to change that radically to the worse as the tiny percent of grains traded internationally were able to set the global price for the bulk of grains grown.

From the time of the earliest traces left by Sumerian civilization some two thousand years before Christ, in the region between the Tigris and Euphrates rivers in today's Iraq, almost every culture had the practice of storing a reserve stock of a grain harvest – right up to the most recent times. Wars, droughts and famines were the reason. When properly stored, grain can be safely stored over a period of about seven years, enabling reserve stocks in case of an emergency.

After the Second World War, Washington created a General Agreement on Tariffs and Trade (GATT) to serve as a wedge to push free trade among major industrial nations, especially the European Community. During initial negotiations, agriculture was deliberately kept off the table at the insistence of the Europeans, especially the French, who regarded political defense of Europe’s Common Agriculture Policy (CAP) and European agriculture protections as non-negotiable.

Beginning in the 1980s with the political crusades of Margaret Thatcher and Ronald Reagan, the extremist free market views of Chicago's Milton Friedman became increasingly accepted by leading European power circles. Step-by-step the resistance to the Washington agriculture free trade agenda dissolved.

After more than seven years of intense horse-trading, lobbying and pressure, the European Union finally agreed in 1993 to the GATT Uruguay Round, requiring a major reduction of national agriculture protection. Central to the Uruguay Round deal was agreement on one major change: national grain reserves as a government responsibility were to be ended.

Under the new 1993 GATT agreement, formalized with the creation of a World Trade Organization to police the agreements with enforceable sanctions against violators, ‘free trade’ in agriculture products was for the first time an agreed priority of the world's major trading nations, a fateful decision to put it mildly.

Henceforth, grain reserves were to be managed by the ‘free market,’ by private companies, greatest among them the US Grain Cartel giants, the behemoths of American agribusiness. The grain companies argued that they would be able to fill any emergency gaps more efficiently and save governments the cost. That ill-advised decision would open the floodgates to unprecedented grain market shenanigans and manipulations.

ADM (Archer Daniels Midland), Continental Grain, Bunge and the primus inter pares, Cargill—the largest privately-held grain and agribusiness trading company in the world—emerged the great winners of the WTO process.

The outcome of the GATT agriculture talks was very much to the liking of the people at Cargill. That was no surprise to insiders. Former Cargill executive Dan Amstutz played the key role in drafting the agriculture trade section of the GATT Uruguay Round.[1] In 1985 D. Gale Johnson of the University of Chicago, a colleague of Milton Friedman, co-authored a seminal report for David Rockefeller's Trilateral Commission that was the blueprint for what they called "market-oriented" agricultural reform. It provided the framework for the US position in the coming GATT Uruguay Round negotiations. The Rockefeller group and its think tanks were the architects of ‘agricultural reform,’ as with so much in our post-1945 world.

The process of eliminating government grain reserves in major producing countries took time, but with the passage of the 1996 Farm Bill, the US had virtually eliminated its grain reserves. The EU followed soon after. Today, among major agriculture producing countries, only China and India still hold to a strategic security policy of nationally held grain reserves. [2]

Wall Street smells blood

The elimination of national grain reserves in the USA and EU and other major OECD industrial countries set the stage for the next step in the process—elimination of agricultural commodity derivatives regulation, allowing unbridled unchecked speculative manipulations.

Under the Clinton Treasury (1999 – 2000) the deregulation of government controls over agriculture commodity speculation was formalized by the Commodity Futures Trading Commission (CFTC)—the government body charged with supervising derivatives trade in exchanges such as the Chicago Board of Trade or NYMEX— and in legislation drafted by Tim Geithner and Larry Summers at Treasury. As described below, it was no accident that Wall Street pushed Geithner, former President of the NY Federal Reserve, to become Obama’s Treasury Secretary in 2008, amid the worst financial debacle in history. Something to do with having foxes guard henhouses.

When Henry Kissinger was Secretary of State in 1972-1973, acting in league with the Department of Agriculture and major US grain trading companies, he orchestrated an unprecedented 200% jump in the price of grain. The price hike was triggered at that time by the US signing a three-year contract with the Soviet Union that had just gone through a disastrous harvest failure.

The US-Soviet deal hit amid global drought and severely reduced harvests worldwide, hardly a prudent time to sell the entire US grain cupboard to an ostensible Cold War opponent. The sale took place amid a major world grain harvest shortfall leading to the explosive price rise. Critical voices in US press at the time appropriately dubbed it the Great Grain Robbery. Kissinger had even arranged for much of the cost of shipping US grain to the Soviets to be paid by US taxpayers. Cargill and company laughed all the way to the bank. [3]

Around the same time, the big American grain companies—Cargill, Continental Grain, ADM, Bunge—began what would be a twenty-year process of transforming world grain markets into venues for controlling essential human and animal nutrition by manipulating grain prices regardless of supply.

The twenty-year process of the US’ gaining control of world grain markets and prices took a giant leap forward in the 1980s with the advent of financial commodity index trading and other derivatives.

The Summers-Geithner-Wall Street new version of the earlier grain robbery especially after 2006 would eventually pale anything Kissinger and friends had engineered in the 1970s.

In 1999, at the urging of major Wall Street banks such as Goldman Sachs, JP Morgan, Chase Manhattan and Citibank, the Clinton Administration drafted a statute that would fundamentally alter grain-trading history. It was called the Commodity Futures Modernization Act and was made law in 2000.

The two key architects of Clinton’s new law were a former Goldman Sachs consultant and Clinton’s Treasury Secretary Larry Summers, and his Assistant at Treasury Tim Geithner, friend of Wall Street and today Obama’s Treasury Secretary. Secretary Summers was also a key player in preventing efforts to regulate financial derivatives in commodities and financial products.[4]

The Summers-Geithner recommendations were contained in a November 1999 Report to Congress from the President's Working Group on Financial Markets, the infamous "Plunge Protection Team." [5]

At the time, the Commodity Futures Trading Commission (CFTC) proposed also to deregulate trading in derivatives between major banks or financial institutions, including derivatives of grain and other agricultural commodities.[6]

The historic and unprecedented deregulation opened a massive hole in Government supervision of derivatives trading, a gaping hole that ultimately facilitated the derivatives games leading to the 2007 financial collapse. It also formed the deregulation free-for-all that is behind much of the recent explosion in grain prices.

Some years earlier in 1991 Goldman Sachs had rolled out its own commodity "index," which was to go on to become the global benchmark for derivatives trading of all commodities, including food and oil. The Goldman Sachs Commodity Index or GSCI was a new derivative that tracked the prices of some 24 commodities -- from corn to hogs to coffee to wheat to precious metals and energy. From the point of view of Wall Street, the idea was brilliant. It let speculators gamble on the future price of an entire range of raw materials in one step, a kind of Wall Street version of a “one-stepâ€

I don't know. A friend of mine told me to quit worrying about Politics and the Tea Party stuff and pay attention to the financial collapse that is coming and sent me this video about buying silver??
I don't plan on changing my tune on the politics side of things.

http://www.youtube.com/watch?v=siXG53Yp ... ture=share