Amber Waves of Pain

How Wall Street (and your 401k) Profit from Hunger

Unidentified man following the developments on the trade board at the Chicago Board of Trade, Stanley Kubrick (Photographer). Retrieved from the Library of Congress, <www.loc.gov/item/2004679048/>

A Second Look at 2008 Commodity Investment

First, if you’re at all interested in understanding how commodity markets work, and how ag products are bought and sold, get yourself a copy of Endless Appetites: How the Commodities Casino Creates Hunger and Unrest by Alan Bjerga. Though it’s approaching 10 years old, it’s insight into food and ag during the 2008 financial crisis is invaluable.

“From 2006–08, CITs on the long side of the market held between one-fifth and one-half of all outstanding wheat contracts at the Chicago and Kansas City exchanges.”

(Adjemian, M., P. Garcia, S. Irwin and A. Smith. “Solving the Commodity Markets’ Non-Convergence Puzzle.” farmdoc daily (3):159,Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, August 21, 2013.)

Pedestrian crosses in front of the Chicago Board of Trade, home of the world’s largest Commodities Exchanges, Photographer Alex Powell

“Investment banks could buy crop contracts, just like a wheat merchant. Food no longer made for just a balanced diet. It balanced portfolios too, opening the doors for millions of investors to have a personal stake in food and energy markets beyond their groceries and gas tanks.” — Endless Appetites

But since Masters testified before the Senate Ag Committee and the CFTC in 2009, the phenomenon his theory explained has been ascribed to other factors, and no substantial link has been made that would suggest causality between increase in index fund investment and food prices.

Kubrick, Stanley, photographer. Men working the floor at the Chicago Board of Trade. Chicago Illinois, 1949. Photograph. https://www.loc.gov/item/2004679046/

“To feed everyone, we need everyone. To make famine a memory, we first must stop forgetting about it.”

Author of Farm (and Other F Words), pre-order now: https://bit.ly/2JTY90i. Rural issues and agriculture writer/researcher. Not a cheerleader, not the enemy.

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