cyu
19th January 2010, 19:27
Garlic-mania like tulip-mania (http://everything2.com/title/Tulipomania)? Another sign of not only the idiocy of capitalism, but of its inability to prioritize economic resources. As for the hoarding of essential goods by speculators, sounds like an appropriate time from some expropriation by those who actually need it.
Excerpts from http://business.asiaone.com/Business/My%2BMoney/Opinion/Story/A1Story20100106-190014.html
Global food prices are rising again with the United Nations Food and Agriculture Organisation (FAO) food price index hitting 168 points in November, the fourth consecutive month of increase and the highest since September 2008.
While this is still about 21 per cent lower than the most recent peak in June 2008 when the index hit 213.5 points, FAO does note that the index has never exceeded 120 points prior to the price spike between 2007/2008.
FAO has possibly for the first time highlighted the 'growing appetite by speculators and index funds for a wider commodity portfolio investments on the back of enormous global excess liquidity', as exacerbating the situation.
Speculation in agricultural commodities may not have reached fever pitch yet but with food shortages expected in 2010, it could.
In China, the bubble people are talking about now is not in real estate but in garlic.
Worries about persistent swine flu prompted a spike in garlic consumption in 2009 and soon, everyone was hoarding it in hopes of making a quick buck. Prices are said to have gone up by 50 per cent in the last few months.
Rice could be next. Barclays Capital Research economist Leong Wai Ho says: 'The bigger problem for food prices is an old one - physical hoarding that can limit physical availability, unlike derivative trading.
'A combination of both fundamental factors and speculation may drive prices higher - just as we saw in the energy market which drove crude oil prices to US$150 per barrel. But of course the speculation in energy market is much bigger because there are lots more energy desks in many banks.'
Excerpts from http://business.asiaone.com/Business/My%2BMoney/Opinion/Story/A1Story20100106-190014.html
Global food prices are rising again with the United Nations Food and Agriculture Organisation (FAO) food price index hitting 168 points in November, the fourth consecutive month of increase and the highest since September 2008.
While this is still about 21 per cent lower than the most recent peak in June 2008 when the index hit 213.5 points, FAO does note that the index has never exceeded 120 points prior to the price spike between 2007/2008.
FAO has possibly for the first time highlighted the 'growing appetite by speculators and index funds for a wider commodity portfolio investments on the back of enormous global excess liquidity', as exacerbating the situation.
Speculation in agricultural commodities may not have reached fever pitch yet but with food shortages expected in 2010, it could.
In China, the bubble people are talking about now is not in real estate but in garlic.
Worries about persistent swine flu prompted a spike in garlic consumption in 2009 and soon, everyone was hoarding it in hopes of making a quick buck. Prices are said to have gone up by 50 per cent in the last few months.
Rice could be next. Barclays Capital Research economist Leong Wai Ho says: 'The bigger problem for food prices is an old one - physical hoarding that can limit physical availability, unlike derivative trading.
'A combination of both fundamental factors and speculation may drive prices higher - just as we saw in the energy market which drove crude oil prices to US$150 per barrel. But of course the speculation in energy market is much bigger because there are lots more energy desks in many banks.'