Remember the Food Crisis?

[RGacky3]

And the food riots and such.

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You can thank the "masters of the universe," this shit is worse than Stalin, at least Stalin killed people with the idea in his head he was making things better, this is literally Goldman sachs killing people for short term profits.

[Ele'ill]

So what happened to the wheat? The promises were on imaginary surplus quantities?

[RGacky3]

No, what happened was goldman longed wheat, meaning they promised at a certain date to buy wheat at a certain date a specified price, meaninig they are speculating that the price will go up above that price, what that means is you create a bubble, which means that the price of food starts raising hugely, then at that certain date, they prolong the bet, making it go on and on.

They were betting on the price of wheat, not the quantity.

These bets were not made on real speculation, in other words goldman did'nt actually think that wheat would go up, what they were doing with manipulating the market to make a short term profits.

So when you buy longs your not buying wheat outright, your betting that the price will go up, then when you buy the wheat you sell it for a profit, the problem is they never actually bought it, they just drove the prices up and up through their bets.

[Publius]

Matt Taibbi discusses the commodities bubble extensively in his book Griftopia. Highly recommended.

EDIT: http://www.youtube.com/watch?v=OKLI2gqy-4g

Here's a video of him discussing the commodity bubble.