Tuesday 15 February 2011

FOOD FOR THOUGHT - The commodity conundrum

Data just released by the World Bank shows that 44 million more people in developing countries have been pushed into extreme poverty in the 8 months since June 2010. They say that food commodity prices have hit 'dangerous' levels.

Reasons why global food prices are heading out of control.

Droughts, storms and fires - These have impacted on rising food prices. However, these events happen every year and are not responsible for the current spikes in commodity prices.

Emerging markets - Rapidly developing central Asian countries are seeing phenomenal economic growth activity. Corporations are exploiting their rising disposable incomes and these countries are now sucking in a diversification of 'en vogue' agricultural products. These are being sourced on the world commodity exchanges and driving prices higher.

Bio fuels - Developed countries, particularly those who have signed up for multinational climate change mitigation agreements, are chasing every megawatt from every possible area. Vast tracts of land have been turned over to produce bio crops. This leaves a significant reduction in the available acreage required to produce sugar and cereals in these cash crop producing regions. Lack of supply pushes prices higher.

Commodity speculation - Investment bankers have switched their strategies in light of the financial crisis and the post crisis equity fear expeienced in dealing rooms around the world. Commodities and complex commodity derivatives are now being transacted with the fury once reserved for stocks, shares, options and futures. With all of these new middle men taking their cut, offloading prices have soared.

Globalisation - This has facilitated a tsunami of commodity exchange possibilities. These new 'panaceas' will realise themselves as speculative bubbles followed by spectacular and chaotic collapses.

Currency wars - Because of the financial crisis and the subsequent debt hangover and austerity programs, Governments around the world are doing their damnedest to reduce the value of their fiat currencies in order to inflate away their structural sovereign debts. This only facilitates a race to the bottom. The result of low currency values is higher import prices.

Crude oil price - For a whole raft of reasons previously discussed, crude oil prices will only be heading in one direction and that is not down. Many pesticides, animal feeds and crop fertilisers are derived from oil based products. Most commodities also attract vast fuel miles and transportation costs.


The Tunisian, Egyptian and future middle eastern, central Asian and African stories all have rising food prices as a catalysing process. In the short term a welcome regime change may come. However it is unlikely that regime changes will curtail the longer term future of escalating food prices.

Monday 7 February 2011

MASTERS & SERVANTS - Say goodbye to hope

Our cabinet ministers and their totally humble beginnings:

David Cameron - Private education at Eton , PPE at Oxford. He is a direct descendent of William IV and cousin of Queen Elizabeth II. He is married to the daughter of the 8th Baronet of Sheffield.

George Osborne - Real name Gideon George Osborne. Private education and studied modern history at Oxford. He is the sole heir to the title and estates of the 17th Baronet of the Irish Ascendancy. Married to the daughter of Lord Howell of Guildford.

Nick Clegg - Private education at Westminster School, Social anthropology at Cambridge. He is a direct descendent of the Imperial Russian Baronecy.

William Hague - Studied PPE at Oxford. President of the Oxford Union.

Ken Clarke - Studied law at Cambridge.

Theresa May - Studied Gegraphy at Oxford.

Liam Fox - Studied medicine at Glasgow.

Vince Cable - Studied natural scieces and economics at Cambridge.

Chris Huhne - Privately educated at Westminster school. Studied French at La Sorbonne and PPE at Oxford.

Andrew Lansley - Privately educated at Brentwood. Studied politics at Exeter.

Michael Gove - Studied English at Oxford.

Philip Hammond - Privately educated at Brentwood. Studied PPE at Oxford.

Andrew Mitchell - Privately educated at Rugby. Studied history at Cambridge.

Owen Paterson - Privately educated at Radley. Married to the daughter of the $th Viscount Ridley.

Michael Moore - Privately educated at Strathallan. Studied politiocs and history at Edinburgh.

Cheryl Gillan - Privately educated at Cheltenham ladies college.

Jeremy Hunt - Privately educated at Charterhouse. Studied PPE at Oxford.

Danny Alexander - Studied PPE at Oxford.

Francis Maude - Privately educated at Abingdon School. Studied law at Cambridge.

Oliver Letwin - Privately educated at Eton. Studied at Cambridge and London Business school.

David Willetts - Privately educated at King Edwards. Studied PPE at Oxford.

George Young - Privately educated at Eton. Studied PPE at Oxford. He is the 6th Baronet.

Dominic Grieve - Privately educated at Westminster School. Studied modern history at Oxford.
These people are clearly able to empathise with thier electorate.

SECOND DARK AGE - Reasons to be fearful Part 3

They're closing in at a phenomenal pace now.

Dogma fueled and ideologically regressive, the class and connections based elite ruling class are back in town and it's only taken 6 months or so to get to where we are now.

It is beginning to look like the last 20 years never happened.

All of those little victories culminating in a more understanding if maybe dumbed-down society now being slashed and burned through an 'oxymoron process' of stealth based shock and awe.

Smoke and mirrors. It hasn't taken long to remove the heat from the bankers and financial centres hangers-on to be forgiven or should that be forgotten.

The new demon is the old demon. Blaming previous administrations for ALL of the WORLDS ills. Spinning a web of confusion as the beast lurches from its slumber towards its sociopathic destiny, our social predestination. And all of this occurring while we sleepwalk into our futures of serfdom and systematic bondage.

We have crossed the rubicon without any knowledge of its identity or existence.

What will the resistance look like this time around? Will it even come?

More fearful than 1984, we look backward and see our futures writ large with capital Cs.

Like an intern in a national stargazey pie, we stare expresionless at death and decay in equal measure, caught at the margins of a Venn diagram, squeezed by the perpetual machine, into the void, into the vast expanse that is the 2nd dark age.



Thursday 3 February 2011

FOOD DEMAND = FOOD PRICES = FOOD RIOTS = CHAOS

Food prices and other commodity values have been rising considerably during the last few years and particularly since the 2008 global financial crisis.


There are several structural reasons for this which have been discussed in earlier blogs.

While in the West, we find these inflationary food prices annoying or worrying or stressful (depending on which social level you exist), it is becoming a far more desperate story for others around the world.

Here in the UK, an individuals food budget is not too significant, and we can always cut down on other things, shop around, find offers and bargains etc.

When food begins to take significant proportions of a family's budget, people begin to attach a political dimension to their concerns and this may result in protests, riots and even regime change.

Here is a list of 25 countries that like Egypt and Tunisia are finding that their food budget is getting out of control. The list shows the percentage of household income that is spent on food:

Venezuela 32.6 %
Lebanon 34.1 %
Latvia 34.3 %
Tunisia 36.0 %
Libya 37.2 %
Dominican Republic 38.3 %
Sri Lanka 39.6 %
China 39.8 %

Romania 45.4 %
Philippines 45.6 %
Kenya 45.8 %
Angola 46.1 %
Pakistan 47.6 %
Egypt 48.1 %
India 49.5 %
Bulgaria 49.5 %
Vietnam 50.7 %
Sudan 52.9 %
Algeria 53.0 %
Bangladesh 53.8%
Azerbaijan 60.2 %
Ukraine 61.0 %
Morocco 63.0 %
Nigeria 73.0 %

It's not just armies that march on their stomachs.