(AsiaNews) - Financial, not technical or weather factors are behind higher prices. Inflation is the by-product of huge liquidity injected into the markets by central banks, in particular the US Federal Reserve, as AsiaNews has pointed over the years. For a long time, the price of raw materials has for the most part not reflected the interaction of supply and demand for real goods. By far, the main factor in shaping the price of almost all raw materials is trading by financial operators who can quickly shift huge amounts of money from government bonds to securities, stocks and so-called goods. For those with the right connections, profits are huge and risks relatively low. Since they have access to almost unlimited resources, they can get what they want. Market values are systematically distorted in large measure, but not exclusively, by the ‘Plunge Protection Team’, a colloquial term used by newspapers for a little known body with an exclusive membership that has a major impact on markets. Set up in 1988, its official name is the President's Working Group on Financial Markets. It includes the secretary of the Treasury, the chairman of the Federal Reserve, the chairman of the Securities and Exchange Commission (SEC), and the chairman of the Commodity Futures Trading Commission. In addition, the Federal Open Market Committee (FOMC) of the Federal Reserve Bank of New York, which oversees the nation's open market operations, is now routinely involved as well. A small number of institutional groups rotate around the aforementioned bodies as well. They include big business banks, like Goldman Sachs and JP Morgan, and hedge funds. Movement of personnel between these institutional groups and big private groups are commonplace; thus, no one should be surprised if a handful of managers in charge of speculative funds can earn huge annual pays, a billion dollars just in fees in some cases.
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THE CATHOLIC KNIGHT: It has been said that when America catches a cold the world catches pneumonia. Our financial crisis in the United States, coupled by massive government spending, and the willingness of the Federal Reserve to float the debt with trillions of dollars in funny money, is now coming back to bite us. The world will suffer first, and then Americans are not far behind.
The riots currently going on around the world may have political underpinnings, but it is inflation and food shortages that has sparked them. These economic woes are in great part the direct result of our own government's criminal negligence.
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