Forum Post: Wheat has gone from $4 to $25 on Speculation alone! Stop Goldman Sachs from ripping off the world!!
Posted 5 years ago on Dec. 9, 2011, 2:40 p.m. EST by fucorporatemedia
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As bad as we think it is in this country, these assholes are making people literally starve all over the world.
In 1991, Goldman bankers came up with a new kind of investment product, a derivative that tracked 24 raw materials, from precious metals and energy to coffee, cocoa, cattle, corn, hogs, soy, and wheat to be known henceforth as the Goldman Sachs Commodity Index (GSCI). For just under a decade, the GSCI remained a relatively static investment vehicle.
Then, in 1999, the Commodities Futures Trading Commission deregulated futures markets. Bankers recognized a good system when they saw it, and dozens of speculative non-physical hedgers followed Goldman’s lead and joined the commodities index game, including Barclays, Deutsche Bank, Pimco, JP Morgan Chase, AIG, Bear Stearns, and Lehman Brothers “You had people who had no clue what commodities were all about suddenly buying commodities,” an analyst from the United States Department of Agriculture told me.
In the first 55 days of 2008, speculators poured $55 billion into commodity markets, and by July, $318 billion was roiling the markets. Food inflation has remained steady since.
Hard red spring wheat, which usually trades in the $4 to $6 dollar range per 60-pound bushel, broke all previous records as the futures contract climbed into the teens and kept on going until it topped $25. And so, from 2005 to 2008, the worldwide price of food rose 80 percent — and has kept rising.