Guest Post by Jake Johnson
Russia’s war on Ukraine has wreaked havoc on global commodity markets, driving up energy and food prices and exacerbating the global hunger crisis, but the chaos has been a major boon for Wall Street commodity traders, new data show.
Russia’s war on Ukraine has wreaked havoc on global commodity markets, driving up energy and food prices and exacerbating hunger emergencies around the world.
But while disastrous for the global poor — millions of whom are living on the brink of famine — the chaos has been a major boon for Wall Street giants, according to new data showing that the world’s 100 largest banks are on pace to smash commodity trading profit records this year.
“The 100 biggest banks by revenue are set to make $18 billion from commodities trading in 2022,” Bloomberg reported last week, citing figures from the London-based firm Vali Analytics. “That would be the highest in the data, which goes back 14 years, and exceed the previous high watermark in 2009.”
“The prediction is the latest evidence that the wild swings in energy prices triggered by the war in Ukraine are delivering a boon to commodity traders, even as they push European nations into crisis,” Bloomberg added.
“Vali, an analytics firm that tracks trading business, compiled data that includes the leading five banks in commodity trading: Macquarie Group Ltd., Goldman Sachs Group Inc., JPMorgan Chase & Co., Citigroup Inc., and Morgan Stanley.”
Though the prices of wheat and other food staples have fallen from their peak in recent months, they remain significantly elevated compared to last year, according to the United Nations’ Food and Agriculture Organization, leaving millions vulnerable to hunger and starvation.
The World Food Program estimates that “as many as 828 million people go to bed hungry every night” and “the number of those facing acute food insecurity has soared — from 135 million to 345 million — since 2019.”
Energy prices have also eased but remain high, contributing to cost-of-living crises throughout Europe and other parts of the globe.
“People’s misery makes capitalists’ superprofit,” Salvatore De Rosa, a researcher at the Lund University Center for Sustainability Studies, tweeted in response to Bloomberg’s reporting. “How do you reform this?”
Wall Street banks have not just benefited from the commodity price increases — they’ve actively helped fuel them, experts say.
“We’re in a market where speculators are driving prices up,” Michael Greenberger, former head of the Division of Trading and Markets at the U.S. Commodity Futures Trading Commission, told Mongabay in July.
“Commodity markets are supposed to be hedging markets for people who are dealing with the commodity involved,” Greenberger said. “In the case of wheat, it would be farmers and people buying wheat. But if we looked at it, there would be banks in there with no interest in what the price of wheat is, writing swaps and controlling this price.”
“It’s too easy to say the war in Ukraine has unbalanced all these markets, [or that] supply chains and the ports are shot, and that there’s a supply and demand reason for these prices going up,” Greenberger added. “My own best guess is anywhere from 10% to 25% of the price, at least, is dictated by deregulated speculative activity.”
Originally published by Common Dreams.
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Imagine our surprise.
Several erroneous and idiotic statements here. Commodity futures markets rely on speculators to create liquidity. Futures traders can make and lose money whether the trend is up or down. There are directionally agnostic in that regard. Moreover, this Greenberger character further lies when he describes these markets as unregulated. They are regulated, but there can be lapses when the laws and rules are selectively applied, such as when the criminal Jon Corzine stole clients’ funds from MF Global and did not go to prison. The problem with the markets is the same as the problem with government: they are managed by liars and crooks. But don’t blame the speculators, they are performing a valuable function to allow for price discovery, and they are a necessary component of a free market.
The emergency is the plan. Create the emergency to justify nationalisation.
Food/water/power crisis is part of the plan. Price caps lead to shortages, shortages lead to rationing. Rationing becomes UBI. You will own nothing and be happy.
GOBBLE-DE-GOOK AND THE FEDERAL RESERVE
Just like David Copperfield, the Fed wants to tease the public to believe elephants can be vaporized only to reappear at the next show. One such Fed diversion has been posted by Steve Bannon. Ref. https://www.warroomforum.com/threads/3-videos-the-united-states-biggest-money-printng-system-scam-is-the-federal-reserve-they-own-the-goverment-by-debt-with-your-tax-dollars.32208/. If you felt there is a whole lot that is missing, or convoluted, in the videos, allow me to add a few steps in the flow of money as it goes through the Fed.
The Fed enters the stage when the government wants spending power it does not have. The U.S. Treasury, with the approval of Congress, sends a deficit-spending Treasury Security [dss] to the Federal Reserve Bank of New York [Bank]. The Bank, acting as a fiscal agent for the government, will credit a government account with the same number of zeros as the security. Everybody knows this as book-entry creation of money. The Treasury draws checks on the account to pay government suppliers. The suppliers deposit the checks in Anybank in Anytown. New value is thus added into circulation as inflation. If the supplier wants cash to buy groceries, Anybank can buy Bennies from Bank for face value. The Fed had bought the Bennies from the U.S. Mint for the cost of printing [about 15-20 cents each]. The cost of printing is listed in The Fed’s Annual Report to Congress as an expense. In years past, each denomination was listed separately and also with the individual cost.
So much for how book-entry credit creates inflation in the market. Let us go back to the Bank holding the dss which the videos do not mention.
The administrators, clerks, and accountants at the Bank need cash to buy groceries, and the Bank has the ideal forum to sell the dss. Securities issued in prior years all have a maturity date and need to be rolled over and the Bank currently rolls over approximately $14 trillion annually. This money, in large part, goes to Primary Dealers for their task in collecting the maturing securities. The exact values of auctioned securities are tabulated in TreasuryDirect Institutional Excel listings. Disbursement of auction funds, and any related operation that the Bank wishes to control, are exclusively managed by the Bank. Ref 31 USC #375.3. The auction accounts have never been audited; they are client accounts, not operational accounts. All audits of the Fed are performed according to guidelines established by the Board of Governors. The GAO has made two security reviews of the digital form developed by the Bank for on-line auction bids which are government funds. Footnotes in the Reviews identify them as not audits.
TreasuryDirect Institutional tabulations historically listed some auction funds as “new cash” and the rest for roll-over. The distinction appears to have become less clear. The dss has been incorporated as a 5% to 20% component of each roll-over security which co-mingles government funds with the Fed’s dss funds. Each trillion dollars of annual dss results in $4 billion that disappears every working day. All profit of the Fed legally belongs to the government. The lack of dss funds showing up on any government account is inherently suspect. In fact, if they did, it would result in no inflation of the economy and no increase in the National Debt.
The last thing the Fed wants you to see clearly is their nefarious handling of the money from auctions of Treasury securities. Speculation leads a person to believe dss funds are covertly slipped to unidentified Rothschild owners of the FRBOG, Inc. who laundry them in BlackRock or Vanguard assets, or fund coups by Kermit Roosevelt, George Soros, John Bolton and others, and also fund innumerable globalist Great Reset projects.
Ref.
THIS IS OUR BANKING SYSTEM