European Commission, Trichet
Refuse To Curb Food Speculation
Feb. 23, 2011 (EIRNS)With basic food prices soaring throughout the world, due to a lack of stocks and out-of-control speculation, Lyndon LaRouche reiterated, on Feb. 14, his call for caps on food prices. The hyperinflationary process, he said, is pushing hot money into commodity markets, with the ensuing explosion in prices. And that, at a time when, according to the World Bank, almost 1 billion people around the world are chronically hungryalmost one-seventh of the world's populationand another billion or so who are undernourished. "We need an international ceiling on food prices," LaRouche said. "We need a freeze on food pricesa capnow! And the Egyptian and the Tunisian situations are the warning."
LaRouche's call for outlawing speculation on food has been echoed over the past two years by Italian Economy Minister Giulio Tremonti. His European colleagues then caught on. On Jan. 20, German Agriculture Minister Ilse Aigner warned, in her opening address to the annual international agro-exhibit in Berlin, that the food riots and destabilization in North African nations point to the need for regulations to protect agricultural commodities from speculators. She and the agricultural ministers of the other 26 EU member governments then sent a request to the European Commission to prepare such regulationsbut the Commission refused, on the absurd grounds that speculation was not to blame for food price inflation!
The situation, however, has become so dramatic since the end of January, that the issue of a ban on food speculation was on the agenda of the G20 meeting, which began on Feb. 18 in Paris.
French Agriculture Minister Bruno Le Maire confirmed the need to limit speculation: "It has to be done. It is unacceptable that people should create artificial food shortages, and seize on a given quantity of this or that commodity with the sole aim of making profits, while millions of people suffer from famine." In fact, European governments might have mentioned the man-made disaster of food price increases during the G20, but they took no action.
Worse, Jean-Claude Trichet, who heads the real EU government, gave controls a thumbs-down. Speaking on French radio Europe 1 on Feb. 20, he said: "We can't do anything about the current rise in fuel and commodity prices, but we must do everything to avoid what we call second-round effects." And what might that be? "I am thinking of the whole range of other prices, including of course, salaries." To increase wages "would be the stupidest thing to do," he stated bluntly.
In fact, all measures show food speculation volume going off the charts. Just consider the following figures supplied by the EU: While involvement of non-food "investor" players in commodities markets was $15 billion in 2003, it shot up to $300 billion by 2008, and that figure has continued to soar. At the Chicago Exchange, 85% of all traders are in no way connected to farming.
Even leading food producers are sounding the alarm: on Feb. 16, the Swiss division of Kraft Foods, the world's second-largest producer of food products, issued a press statement denouncing hedge funds for pumping enormous capital volumes into agricultural commodities since mid-2007, thereby causing food price inflation at rates never before seen. This threatens the secure supply of food, Kraft Foods warned, calling for regulation banning speculators from touching agricultural commodities.