How Banks Cause World Hunger [GRAPHIC]

Banks are among some of the most hated companies in America, largely for their role in causing a global financial crisis. That reputation could only get worse thanks to one of their more controversial practices: Food Speculation.

Banks and other financial speculators are increasingly "betting on food prices in financial markets," according to this infographic from the World Development Movement. Food prices now account for 70 percent of total expenses in some of the world's poorer households, hitting a record high in February. Looking forward, the OECD estimates that over the next decade cereal prices will rise 20 percent. That's still less than meet prices, which are expected to jump by nearly a third.

Here is the infographic from the World Development Movement:

Comments

[joebaggadonuts]

10:47 AM on 09/17/2011

While this all may be true, there is such a concept as planetary carrying capacity vs. population, and such a thing as climate change, and possibly too a thing called peak oil, all of which are conspiring (if they exist) to raise food prices TOO.

[Ronny Carr]

12:07 AM on 09/17/2011

Boycott the Big Banks!

[Warren Yuill]

10:14 AM on 09/16/2011

What about government subsidized ethanol projects. They have done more to drive up the price of corn and wheat than commodities speculation.

[johnnymainstreet]

07:37 PM on 09/15/2011

They can end speculation on oil and food by simply making it part of the futures contract that the owner of the contract has to ultimately take delivery of the commodity within a specified time. As 99% of the speculators would not want to run the risk of actually having to own the commodity, they would simply stop their gambling on it. You know the old saying of follow the money, it always stops right at the Bankers/Wall Streets door. They have ruined the worlds economy and made a lot of peoples lives an unnecessary disaster. All because of their greed.

[passy hearst]

02:34 AM on 09/17/2011

Unfortunately, they already figured that scheme out as well: http://www.reuters.com/article/2011/07/29/us-lme-warehousing-idUSTRE76R3YZ20110729

[kd1s]

06:31 PM on 09/15/2011

And if you hadn't notice, food prices in the U.S. are edging upward too. And I have read that the Spring Uprisings in the mid east had a large basis in the increased price of food. They had better be VERY careful what they speculate upon, because if the U.S. goes that path it's going to be ugly.

[jwalter]

04:13 PM on 09/15/2011

It's not so much speculation as it is INFLATION. The speculation going on here is just how much value your currency is losing. The Federal Reserve and all other central banks are to blame for increasing the cost of the goods and services we use every day.

[doru]

01:39 PM on 09/15/2011

A time for change -

http://thrivemovement.com/

[1Truthseeker]

12:26 PM on 09/15/2011

Speculation is gambling. Food and energy, being the essential and integral need for peoples survival, are two arenas that need to be disbarred of gamblers.

[garystartswithg]

01:30 PM on 09/15/2011

I don't think people want to realize there is blood all over their "american dream". people go jobless in this country so someone elses portfolio will perform. of course our little tea party cheers letting the uninsured die while they collect on socialized medicine -- guess that says it all.

[1Truthseeker]

01:59 AM on 09/23/2011

You have a point. It's just that admitting that there is blood all over their "american dream" is fanatically held to be un-american!

[jwalter]

04:12 PM on 09/15/2011

Every purchase you make is a gamble. You will either be satisfied with your investment or not. The biggest gamble by far is the idea that central banks can improve the economy by devaluing the world's currencies, which only makes everything more expensive.

[joebaggadonuts]

10:49 AM on 09/17/2011

Devaluing currencies makes everything but our debt more expensive. I don't have a problem with that.

[1Truthseeker]

12:13 PM on 09/15/2011

Finally a graphic report that establishes a direct link to the rising costs of food and energy to speculators. The major Grain exchanges and the Monsantos of the world play a huge role in this profit extraction monopoly that perpetrates this spread of poverty under the cloak of "free market"
The food and energy market is anything but free. Heavily taxpayer subsidized and mega sized they have Zero competition at home and in the world. In the US we have lost 90% of our family farms to mega agro corporations.

[JtownesquireAgain]

09:38 AM on 09/15/2011

Speculation does to the commodity that is being speculated on what DeBeers has done to diamonds...artificially influence the price.

When A buys lots of "shares" in corn...the inplication is that A thinks corn prices will rise...so others buy corn....this causes the price of the "shares" to rise....so..people have to pay more and more to get those "shares"...this in turn means that the corn has to sell for more whne it is produced for these people to make money....hence the price of corn goes up.

It's not rocket science. While DeBeers manipulates the supply side of the equation with diamonds to keep teh prices high...speculators are simply taking a different road to the same place (and that place is a bank in the Caymans or Switzerland)!

[Matt Crouse]

11:06 AM on 09/15/2011

The big difference is that investment banks are not stockpiling food the way DeBeer is stockpiling diamonds. As I said earlier when you buy a commodity futures contract, you ultimately have to sell it unless you are taking delivery of the commodity.

[too-small-to-fail]

09:23 AM on 09/15/2011

What kind of world is this we live in where investors can become wealthy betting on the misery of others?

[seanny53]

09:46 AM on 09/15/2011

A world that has forgotten the greatest teaching of all the great religions: Do unto others as you would have them do unto you.

[joebaggadonuts]

10:51 AM on 09/17/2011

This has been going on for a very long time. Civilization's purpose is to help the vast majority of folks deal with this fact of life.

[zeeke]

09:14 AM on 09/15/2011

A wonderful species this.

[DFWMoneyCoach]

09:13 AM on 09/15/2011

The larger problem is that the Fed is trying to reflate the economy. Decades of easy money policies have created asset bubbles that were then monetized and added to the world's "wealth". Presto! The music stops and these "assets" plummet in value. The Fed steps in and provides a tsunami of liquidity and pushes savings rates to zero. This effectively rescues large holders of capital but encourages them to chase yield by over charging on consumer credit and running up basic commodities via speculation.....

[1Truthseeker]

12:21 PM on 09/15/2011

This is precisely while the Federal Reserve, a private corporation with limited oversight and accountability to our government need to be disbarred of it authority to formulate our fiscal and monetary policies. The primary and sole beneficiaries of the Fed's policies are the Large Bank Holding Corporations like Goldmann Sachs, JP Morgan Chase, Citi and Wells Fargo. In light of the history of the Central Banking system and the control it has of our government it will take a National Referendum to make this happen. Our elected officials know that everyone who has dared to disbar the Central Bank in the past was assassinated.

[ecrichert12]

09:12 AM on 09/15/2011

Another HP article, another misguided view on economics.

Speculation doesn't lead to higher (or lower) prices, it just enables a more efficient way of arriving at a more accurate price. I didn't see anyone killing speculators when the price of oil fell from $140 to $40 a barrel, only on the way up does this complaint get manifested.

Did any of you consider Inlfation? When you take efforts to devalue a currency to make up for fiscal deficits, anything priced in that currency NECESSARILY becomes more expensive. If you don't want food deflation, don't devalue your currency.

[GravitonX]

09:20 AM on 09/15/2011

Wrong. Speculation does indeed drive up inflation, because the goal is to buy low, hope that prices rise (presumably by reducing supply) or deliberately drive up prices, and selling high.

The article is not misguided. In fact, it's very clear. It's your understanding that is flawed.

[ecrichert12]

11:12 AM on 09/15/2011

Speculation goes in both directions. 'buy low sell high' isn't the only way to make money. Speculators make (and lose) just as much money by "sell high and buy low' (shortselling).

Absent short selling, your point would be valid, but we have the benefit of equal opportunity for fundamentals and news stories to drive prices of securities (stocks/bonds/structured products/comodities/etc) in both directions.

Where were you in 2008... food and energy prices collapsed because of deteriorating demand and high speculation to the downside. were you silent or were you one of the people claiming speculation was driving down prices. Either you're misunderstanding what speculation is or intentionally ignoring half the evidence.

[redrockss]

11:14 AM on 09/15/2011

Is that why when people speculate on gas prices the price of a gallon of gas goes up? I'm confused, please explain.

[outasite]

09:02 AM on 09/15/2011

I don't know. I'm still a bit lost. I think inflation is more responsible for rising food prices. They also mentioned areas that are torn apart by war. Dhaka and Indonesia have been battling natural disasters. In China, food seems plentiful. When Americans return to agriculture, and the government stops subsidizing it and paying farmers not to plant, things will change. BUY LOCAL!

[ecrichert12]

09:13 AM on 09/15/2011

" I think inflation is more responsibl­e for rising food prices"

Well put

[GravitonX]

09:14 AM on 09/15/2011

Speculation drives inflation.

You missed that part.