Erle Frayne D. Argonza
A full-blown civil war is now brewing as I write this note. As the gloomy events unfold, greedy speculators are busy taking advantage of a conflict situation by playing it up nauseatingly on the petrol spot market. Wars and mini-hotspots surely have a way of making some greedy families make lots of money, so let me add more reflections about the Libyan hot fires’ impact on oil price.
The notorious financier speculators have been planning all along to cash in on a global conflagration that should have pitted the Sunni-Zion alliance versus Iran-led coalition. Such a planned catastrophe was suddenly derailed by the mass rousing of younger generations of Arabs who now desire for the overthrow of their respective tyrants or sovereigns.
With the world war III prospect now sorely diminished, the financiers had to find a quick fix to their addictive greed for easy profits. And that’s how their fixated eyes marveled at the conflict that suddenly unveiled in Libya which, as everybody knows, sits on huge reserves of oil from where the tyrant largely derives his income for country and family.
Nobody knows how long the conflict lasts in Libya, but it is getting clearer as of this writing that Kadhafy’s legitimacy before his own supporters is rapidly effacing. The situation is as fluid as petrol gushing out of Libya’s oil wells, so it pays to keenly observe the events on a day-to-day basis.
One thing though is certain about the conflict’s time frame: it will be short, and no protracted war will come from the forecast loser—tyrant Kadhafy and minions. So, given the short time frame, the speculators have to ride along with the waves of turmoil, and cash in quick on the hot events.
So the spot market is ablaze at this moment with a sort of hour-by-hour anaysis of the situation and superficial forecast of oil prices. Superficial, because insider trading is the in-thing among the dirty players in the same commodity market, with a coterie of financiers fronting for their invisible sponsors among the Anglo-European oligarchs. There is no science into the oil spot market, just plain mafia-type dirty speculations.
Already, retail oil prices are skyrocketing in countries that are dependent on oil imports. In the United States, oil prices get hiked on a daily basis. East Asian countries follow very closely not far behind from the USA in terms of constant rising of retail prices, or those that hurt the pockets of downstream end-users. Food prices are direly affected by the same OPH (oil price hikes), and so you could imagine the glee of another branch of the dirty speculators cashing in on the food commodities trading.
With the dizzying rapidity of the flow of conflict-induced events, we can only surmise that OPH will hover the $170-$200 per barrel of oil (‘sweet crude’ standard). As the events are happening, anti-OPH and anti-food price hikes are now raging across the globe, including the Philippines. These protest actions are complicating the mass panic that is generated by the rising prices of oil & food, with potential hysteria that could explode into food riots in the short run.
While billions of poor folks suffer from the rising prices, the greedy speculators’ pockets are satiated anew rendering them instantly happy over very fat profits. Commodities speculation is done without any compunction over their catastrophic effects on peoples, as they are done by conscienceless market players.
But never forget that the greed of the dirty speculators is insatiable, and so the said financiers’ eyes are again busy searching for some other hot fires in the event that the Libyan conflict ends soon. Those hot fires are no other than the socio-political turmoil that is now brewing across the Arab region.
[Philippines, 04 March 2011]
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Showing posts with label inflation. Show all posts
Showing posts with label inflation. Show all posts
Tuesday, March 08, 2011
Wednesday, July 02, 2008
SPECULATION PESTERS FOOD: U.S. CASE
Bro. Erle Frayne Argonza y Delago
Greedy financiers across the globe made humungous killing in the commodities futures recently, which largely explains the sudden hyper-inflationary price increases in grains. The panic that resulted from the ‘self-fulfilling prophecy’ that food stocks are running out further exacerbated the already volatile situation of the food markets.
The flawed reasoning—that the problem has a great deal to do with the supply side—has been bandied by the paid Pied Pipers of the greedy financiers. This is an old hat lie, and facts about the capital and financial markets belie such cranky rationale for a sector (food) that has been subordinated to predatory finance worldwide.
Below is a case study regarding the subject matter of sky-rocketing food prices on account of speculation, culled from the Executive Intelligence Review. Make your own assessment about the matter.
[Writ 30 June 2008, Quezon City, MetroManila]
Speculators Making Killer Profits Off Midwest Flooding While Farmers Can't Sell Grain
June 16, 2008 (EIRNS)—This morning's frantic speculation on the Chicago Board of Trade (CBOT) opened with corn (December futures) up 19 cents, for a record $8.06 a bushel (contrast to $4 a year ago); and new crop soybeans hit a record $15.53 a bushel (contrast to $8 a year ago). This is the 12th consecutive day for record-setting corn prices on the exchange, occasioned by binge-speculation off the likely destruction of at least 5 million acres (2 million hectares) of crops in the Midwest flood zone, including at least 3 million acres of corn (out of 86 million nationally).
The volume of grain and soy trading contracts is soaring on the CBOT, part of the Chicago Mercantile Exchange (CME). All futures trading has risen 26 percent over the first part of 2008 on the CME, compared to same time 2007 (including non-commodity futures of all kinds). The Commodity Futures Trading Commission (CFTC), the Federal agency which could stop the deadly game, but will not, released a report June 13, showing huge flows of funds going into the corn market. The CFTC report gives specifics on the record volumes of outstanding corn commitments—amounting to paper bushels, the way paper barrels exist in oil speculation. The CFTC says that speculative funds have added 34,732 contracts to their long positions and cut 4,588 contracts from their short positions, putting them net long on 219,041 corn futures contracts. Index funds are now net long on 427,352 contracts.
At the same time, prices are falling for the farmer trying to forward-sell his corn or soybeans to his local buyer. There has been a 12 cent drop in the prices offered to farmers for their corn over the past 24 hours! This comes on top of an average 4 cent a bushel drop in prices to the farmer last week in the Cornbelt, according to a spot check of local grain buyers, by Dow Jones. This farmer price disparity with the exchange prices, reflects not only the physical destruction of shipping and processing infrastructure, but also the fact that whenever prices spike on the Chicago Board of Trade, the local grain elevator or buyer is hit with a margin call, that he now cannot meet. So he is not offering farmers forward-contracts. Many local terminals, strapped for cash, have gone bankrupt, or sold out to the wave of hedge and index funds now on a buying spree for hard infrastructure, with which to further hold and hoard grain. E.g. WhiteBox, based in Minneapolis. The cartel terminals, dominated by Cargill and ADM, started denying forward contacts to purchase farmers' grain months ago, under the principle: protect yourself, screw the farmer. The cartel firms offer the farmer take-it-or-leave-it prices, and terms of delivery.
On top of this, key grain and meat processing facilities are shut down by the flood all over the Midwest, for example, a huge ADM corn-processing plant in Cedar Rapids.
Greedy financiers across the globe made humungous killing in the commodities futures recently, which largely explains the sudden hyper-inflationary price increases in grains. The panic that resulted from the ‘self-fulfilling prophecy’ that food stocks are running out further exacerbated the already volatile situation of the food markets.
The flawed reasoning—that the problem has a great deal to do with the supply side—has been bandied by the paid Pied Pipers of the greedy financiers. This is an old hat lie, and facts about the capital and financial markets belie such cranky rationale for a sector (food) that has been subordinated to predatory finance worldwide.
Below is a case study regarding the subject matter of sky-rocketing food prices on account of speculation, culled from the Executive Intelligence Review. Make your own assessment about the matter.
[Writ 30 June 2008, Quezon City, MetroManila]
Speculators Making Killer Profits Off Midwest Flooding While Farmers Can't Sell Grain
June 16, 2008 (EIRNS)—This morning's frantic speculation on the Chicago Board of Trade (CBOT) opened with corn (December futures) up 19 cents, for a record $8.06 a bushel (contrast to $4 a year ago); and new crop soybeans hit a record $15.53 a bushel (contrast to $8 a year ago). This is the 12th consecutive day for record-setting corn prices on the exchange, occasioned by binge-speculation off the likely destruction of at least 5 million acres (2 million hectares) of crops in the Midwest flood zone, including at least 3 million acres of corn (out of 86 million nationally).
The volume of grain and soy trading contracts is soaring on the CBOT, part of the Chicago Mercantile Exchange (CME). All futures trading has risen 26 percent over the first part of 2008 on the CME, compared to same time 2007 (including non-commodity futures of all kinds). The Commodity Futures Trading Commission (CFTC), the Federal agency which could stop the deadly game, but will not, released a report June 13, showing huge flows of funds going into the corn market. The CFTC report gives specifics on the record volumes of outstanding corn commitments—amounting to paper bushels, the way paper barrels exist in oil speculation. The CFTC says that speculative funds have added 34,732 contracts to their long positions and cut 4,588 contracts from their short positions, putting them net long on 219,041 corn futures contracts. Index funds are now net long on 427,352 contracts.
At the same time, prices are falling for the farmer trying to forward-sell his corn or soybeans to his local buyer. There has been a 12 cent drop in the prices offered to farmers for their corn over the past 24 hours! This comes on top of an average 4 cent a bushel drop in prices to the farmer last week in the Cornbelt, according to a spot check of local grain buyers, by Dow Jones. This farmer price disparity with the exchange prices, reflects not only the physical destruction of shipping and processing infrastructure, but also the fact that whenever prices spike on the Chicago Board of Trade, the local grain elevator or buyer is hit with a margin call, that he now cannot meet. So he is not offering farmers forward-contracts. Many local terminals, strapped for cash, have gone bankrupt, or sold out to the wave of hedge and index funds now on a buying spree for hard infrastructure, with which to further hold and hoard grain. E.g. WhiteBox, based in Minneapolis. The cartel terminals, dominated by Cargill and ADM, started denying forward contacts to purchase farmers' grain months ago, under the principle: protect yourself, screw the farmer. The cartel firms offer the farmer take-it-or-leave-it prices, and terms of delivery.
On top of this, key grain and meat processing facilities are shut down by the flood all over the Midwest, for example, a huge ADM corn-processing plant in Cedar Rapids.
Wednesday, June 18, 2008
RECESSION STAYS, SPIRAL POINTS TO GLOBAL MELTDOWN
Erle Frayne Argonza
The recession stay, the downward global economic spiral will continue for an indefinite time. This is the pattern that we can now see across the globe.
Stock markets have been crashing, going through a freefall for couples of months now. In Manila, the Philippine stock market is down at 2,500+ points as of this morning, or 800 points short of its best performance of 3,300+ late last year. The pattern is true in other stock markets as well.
One thing is clear: this is a global meltdown going on, and the spiral’s turn-around towards more positive gains in the succeeding months. Trillions of dollars have already gone down the drain, loses that may never be recovered again.
Many pockets are getting badly hurt, both from the fund-rich hedge funds and portfolio financiers to ordinary middle class investors. Just about two (2) years ago, everything was bullish in world stocks, most especially in Asia. That situation had since evaporated.
Unfortunately, the harbingers of liberal dogma are still banking on liberalization policies that have proved to be so bankrupt they are, in fact, the very cause of this global meltdown shaping up. The ‘virtual economy’ unleashed by liberalization resulted to looting sprees by fund managers and hedge fund operators, the same money that they partly utilize for corporate social responsibility.
Now the oil price hikes and currency market volatilities have compounded the recession. It’s just mid-2008 by the way, and there’s still the bombing of Iran that we all await as the non-surprise ‘surprise attack’ from neo-cons and Zionist fascists, which will guarantee higher prices for oil and better dollar leveraging power. This will come sooner or later.
Forecasting has been made simpler by anarchic events at this moment. There is no end in sight to the recession, oil prices will still move up, and the recession will lead to a deeper meltdown of the liberal financial-monetary system of casino-style looting by financier operators.
Better do some belt-tightening if you haven’t done this yet. Let’s continue to watch the horrible unfolding of events. Madness and unparalleled greed have shattered the financial-monetary system, the ‘virtual economy’ of predatory financiers.
[Writ 12 June 2008, Quezon City, MetroManila]
The recession stay, the downward global economic spiral will continue for an indefinite time. This is the pattern that we can now see across the globe.
Stock markets have been crashing, going through a freefall for couples of months now. In Manila, the Philippine stock market is down at 2,500+ points as of this morning, or 800 points short of its best performance of 3,300+ late last year. The pattern is true in other stock markets as well.
One thing is clear: this is a global meltdown going on, and the spiral’s turn-around towards more positive gains in the succeeding months. Trillions of dollars have already gone down the drain, loses that may never be recovered again.
Many pockets are getting badly hurt, both from the fund-rich hedge funds and portfolio financiers to ordinary middle class investors. Just about two (2) years ago, everything was bullish in world stocks, most especially in Asia. That situation had since evaporated.
Unfortunately, the harbingers of liberal dogma are still banking on liberalization policies that have proved to be so bankrupt they are, in fact, the very cause of this global meltdown shaping up. The ‘virtual economy’ unleashed by liberalization resulted to looting sprees by fund managers and hedge fund operators, the same money that they partly utilize for corporate social responsibility.
Now the oil price hikes and currency market volatilities have compounded the recession. It’s just mid-2008 by the way, and there’s still the bombing of Iran that we all await as the non-surprise ‘surprise attack’ from neo-cons and Zionist fascists, which will guarantee higher prices for oil and better dollar leveraging power. This will come sooner or later.
Forecasting has been made simpler by anarchic events at this moment. There is no end in sight to the recession, oil prices will still move up, and the recession will lead to a deeper meltdown of the liberal financial-monetary system of casino-style looting by financier operators.
Better do some belt-tightening if you haven’t done this yet. Let’s continue to watch the horrible unfolding of events. Madness and unparalleled greed have shattered the financial-monetary system, the ‘virtual economy’ of predatory financiers.
[Writ 12 June 2008, Quezon City, MetroManila]
Thursday, June 12, 2008
GAS PRICES STAY TO SAVE DOLLAR FROM COLLAPSE
Erle Frayne Argonza
Good afternoon from Manila!
Fellows of Planet Earth, better prepare yourself for the eventualities that have become a fact of life: high gas prices, and high food prices. Let me focus here on high gas prices, although gas and food are very much inter-related.
The good news for those workers and businesses that utilize the US dollar for their transactions is that the dollar will be quite strong for a time. My own forecast is that, over the next twelve (12) months at least, the strong dollar stays. The dollar is used to transact oil, remember, so you’d see its strength sustained for a time as oil price hikes will be the ‘event of the moment’ in the short run.
The dollar was actually already in the downward trend, moving rapidly towards a crash from middle of 2007 onwards. The US recession came, confidence in the dollar was low, and so the currency traders desired so strongly to unload as much dollar as they can before it would go up again.
To make things more hair-raising, the global financiers actually wanted the dollar to get crashed like smashed potato. The financiers’ problem last year was: which currency to substitute for the dollar given that Uncle Sam’s currency remains as the international legal tender, thanks to the Bretton Woods agreement that ensured this role for the same currency.
The options eventually narrowed down to just two: the (a) Euro or the (b) pounds sterling. Some quarters among the financiers were for the pounds sterling, and it seemed this dominated financier mindsets last year, though there were insiders who opted for the euro.
The next question was, granted that a currency option war clear, say that the pounds sterling will be the currency of the moment, will the volume of pounds across the globe suffice to make a sweeping decision to dump the dollar? The volume of dollars across the globe is simply gargantuan, it just isn’t that easy to play God with this currency.
Finally, at the end of the day, with speculators playing around to keep gas prices up, the forced decision was for the dollar to stay after all. This is, in fact, a revenge of Uncle Sam on those predatory forces who simply wish to play God with currencies and destroy national economies without compunction, no matter if many poor lives will be dead in their crashing effects.
On the other hand, Anglo-American oil men are having a field day as speculative trading has shifted to their side for some time, and will be so for at least twelve (12) months. The US dollar’s downward spiral has been put on hold for a time, and the said oil men will be happier by many folds in the months ahead as their purses will bloat to Glad Tidings.
Fellows, accept this as a fact of life: oil prices will be up. Prepare your necessary contingency measures as their effects will be upon you.
[11 June 2008, Quezon City, MetroManila]
Good afternoon from Manila!
Fellows of Planet Earth, better prepare yourself for the eventualities that have become a fact of life: high gas prices, and high food prices. Let me focus here on high gas prices, although gas and food are very much inter-related.
The good news for those workers and businesses that utilize the US dollar for their transactions is that the dollar will be quite strong for a time. My own forecast is that, over the next twelve (12) months at least, the strong dollar stays. The dollar is used to transact oil, remember, so you’d see its strength sustained for a time as oil price hikes will be the ‘event of the moment’ in the short run.
The dollar was actually already in the downward trend, moving rapidly towards a crash from middle of 2007 onwards. The US recession came, confidence in the dollar was low, and so the currency traders desired so strongly to unload as much dollar as they can before it would go up again.
To make things more hair-raising, the global financiers actually wanted the dollar to get crashed like smashed potato. The financiers’ problem last year was: which currency to substitute for the dollar given that Uncle Sam’s currency remains as the international legal tender, thanks to the Bretton Woods agreement that ensured this role for the same currency.
The options eventually narrowed down to just two: the (a) Euro or the (b) pounds sterling. Some quarters among the financiers were for the pounds sterling, and it seemed this dominated financier mindsets last year, though there were insiders who opted for the euro.
The next question was, granted that a currency option war clear, say that the pounds sterling will be the currency of the moment, will the volume of pounds across the globe suffice to make a sweeping decision to dump the dollar? The volume of dollars across the globe is simply gargantuan, it just isn’t that easy to play God with this currency.
Finally, at the end of the day, with speculators playing around to keep gas prices up, the forced decision was for the dollar to stay after all. This is, in fact, a revenge of Uncle Sam on those predatory forces who simply wish to play God with currencies and destroy national economies without compunction, no matter if many poor lives will be dead in their crashing effects.
On the other hand, Anglo-American oil men are having a field day as speculative trading has shifted to their side for some time, and will be so for at least twelve (12) months. The US dollar’s downward spiral has been put on hold for a time, and the said oil men will be happier by many folds in the months ahead as their purses will bloat to Glad Tidings.
Fellows, accept this as a fact of life: oil prices will be up. Prepare your necessary contingency measures as their effects will be upon you.
[11 June 2008, Quezon City, MetroManila]
FAO SUMMIT OVER: WILL FOOD OVERFLOW OUR PLATES THEREAFTER?
Erle Frayne Argonza
Good afternoon, Fellows of Planet Earth!
The FAO just concluded the global food summit recently in Europe, and many concerned fellows are asking whether there will be an overflowing of food in our plates after this conference. For the simple folks, the double query is whether there will be food in their plate, and whether food prices can go down a bit to alleviate the hurt on their pockets.
You see, when folks’ pockets are in pain at the same time that food prices are prohibitive and food availability insecure, chances are that they’d go out rioting. We saw the rioting take burst forth in at least thirty-seven (37) countries across the globe.
So, after the FAO summit, is food guaranteed for everyone else (food security) at fairly affordable price (fair trade)? And, may it be added, without those anarchic riots that go with food-related protests? Whether these answers were responded to in the summit isn’t really clear after all. It seems that the food body ended with more questions to answer than for a reduction of those that already hound the food sector.
Let’s take the issues one at a time. First of all, the food prices went up sky high couples of weeks back due largely to predatory financiers’ speculations on the food commodity futures. And this speculation was made possible largely due to the liberalized currency, financial and monetary markets, thanks to the GATT-Uruguay Rounds and the preceding liberalization efforts that began way back 1971 yet.
That’s why, when tasked to re-draw the policy architecture for the food sector in the Philippines, this expert, acting as project consultant for a national NGO coalition here, recommended the strict enforcement of monetary and financial control measures as part of ‘fair trade’ policies. Volatile currency and financial markets redound to food insecurity in the short run, as the facts now reveal. (See the book E. Argonza, Fair Trade and Food Security: Framework and Policy Architecture, Kaisampalad, 2005/08.)
Next comes those affecting the backward and forward linkages of the food sector. The monopoly of patents (note Monsanto case), inefficient production technologies, pest management issues, and other related issues continue to pester the supply side. Hoarding and smuggling pester the sector on the demand side. Then, there is the high protection walls of Northern economies on the sector, trade barriers that are nowhere near to being addressed.
There are much more issues to reflect about. Name a contentious issue, and find out whether this was answered by the summit. FAO summits are now turning to be more like the WTO meetings that ended in fiasco. With fiasco comes violent protests as expected. Incidentally, we can’t put protests on our plates to nourish our bodies.
[Writ 11 June 2008, Quezon City, MetroManila]
Good afternoon, Fellows of Planet Earth!
The FAO just concluded the global food summit recently in Europe, and many concerned fellows are asking whether there will be an overflowing of food in our plates after this conference. For the simple folks, the double query is whether there will be food in their plate, and whether food prices can go down a bit to alleviate the hurt on their pockets.
You see, when folks’ pockets are in pain at the same time that food prices are prohibitive and food availability insecure, chances are that they’d go out rioting. We saw the rioting take burst forth in at least thirty-seven (37) countries across the globe.
So, after the FAO summit, is food guaranteed for everyone else (food security) at fairly affordable price (fair trade)? And, may it be added, without those anarchic riots that go with food-related protests? Whether these answers were responded to in the summit isn’t really clear after all. It seems that the food body ended with more questions to answer than for a reduction of those that already hound the food sector.
Let’s take the issues one at a time. First of all, the food prices went up sky high couples of weeks back due largely to predatory financiers’ speculations on the food commodity futures. And this speculation was made possible largely due to the liberalized currency, financial and monetary markets, thanks to the GATT-Uruguay Rounds and the preceding liberalization efforts that began way back 1971 yet.
That’s why, when tasked to re-draw the policy architecture for the food sector in the Philippines, this expert, acting as project consultant for a national NGO coalition here, recommended the strict enforcement of monetary and financial control measures as part of ‘fair trade’ policies. Volatile currency and financial markets redound to food insecurity in the short run, as the facts now reveal. (See the book E. Argonza, Fair Trade and Food Security: Framework and Policy Architecture, Kaisampalad, 2005/08.)
Next comes those affecting the backward and forward linkages of the food sector. The monopoly of patents (note Monsanto case), inefficient production technologies, pest management issues, and other related issues continue to pester the supply side. Hoarding and smuggling pester the sector on the demand side. Then, there is the high protection walls of Northern economies on the sector, trade barriers that are nowhere near to being addressed.
There are much more issues to reflect about. Name a contentious issue, and find out whether this was answered by the summit. FAO summits are now turning to be more like the WTO meetings that ended in fiasco. With fiasco comes violent protests as expected. Incidentally, we can’t put protests on our plates to nourish our bodies.
[Writ 11 June 2008, Quezon City, MetroManila]
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