Johann Hari: How Goldman gambled on starvation

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."
[...]
When I asked Merrill Lynch's spokesman to comment on the charge of causing mass hunger, he said: "Huh. I didn't know about that." He later emailed to say: "I am going to decline comment." Deutsche Bank also refused to comment. Goldman Sachs were more detailed, saying they sold their index in early 2007 and pointing out that "serious analyses ... have concluded index funds did not cause a bubble in commodity futures prices", offering as evidence a statement by the OECD.

How do we know this is wrong? As Professor Ghosh points out, some vital crops are not traded on the futures markets, including millet, cassava, and potatoes. Their price rose a little during this period – but only a fraction as much as the ones affected by speculation. Her research shows that speculation was "the main cause" of the rise. [...]

Nothing will ever change unless these suits get dragged before international courts charged with crimes against humanity. Getting their children locked up in their third world sweatshops would help too.

Conscious evil is a triviality in the 21st century. The real evil is that which grinds along relentlessly because those that drive it can hide from all consequence and pretend it doesn't exist.

Tags: Goldman Sachs, banality of evil, derivates, food, gambling, moral bankruptcy, wall street

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How nauseating. Rich people suck ass.
Hari over simplifies, leaving out how many farmers in developing nations have been forced to buy seed from western agribusinesses, increased costs and declining profits driving many of them into bankruptcy...in nations who's "debtor" laws have not changed since the middle ages, meaning entire families are libel for the debt.

Those farmers were also beneficiaries of the global commodity craze, which is why there was an increase in starvation - local farmers exported or took advantage of the inflated prices to relieve their debt burden.

There is no easy solution to the problem, at the end of the day, there are far too many people competing for a dwindling amount of resources.

If people must go on witch hunts, may I suggest religious leaders of those poor countries who not only abolish family planning programmes, but encourage the locals to have large families to fill their pews/coffers.
Alex Catgirl: Hari over simplifies, leaving out how many farmers in developing nations have been forced to buy seed from western agribusinesses

Ok, and what does this have to do with financial derivatives? Other than opening a gate for yet another "let's all dogpile on Monsanto" thread derailment?

And it helps if you actually read the article -

As Professor Ghosh points out, some vital crops are not traded on the futures markets, including millet, cassava, and potatoes. Their price rose a little during this period – but only a fraction as much as the ones affected by speculation. Her research shows that speculation was "the main cause" of the rise.

The cuplrit here is our entire financial system and the corrupt engineering of reality that it permits without scrutiny and without any realistic criminal law to deal with it. This poison will continue, business as usual, for as long as people can look at the facts as explained in the article in simple English, have them go in one ear and out the other, then instantly turn around and have their attention diverted by easier to identify targets like the agribusiness. The ease with which you get distracted, by extension, makes you an accessory to this derivative murder. All that time wasted protesting Monsanto seeds while letting Goldman-Sachs get away with mass extermination. It's like PETA protesting the use of donkeys in suicide bombings.

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