How Global Investors Make Money Out of Hunger

http://www.spiegel.de/international/world/0,1518,783654,00.html

09/01/2011

Speculating with Lives

By Horand Knaup, Michaela Schiessl and Anne Seith

In recent years, the financial markets have discovered the huge opportunities presented by agricultural commodities. The consequences are devastating, as speculators drive up food prices and plunge millions of people into poverty. But investors care little about the effects of their deals in the real world.

The room in which the world's food is distributed looks everything but appetizing. Bits of paper and disposable cups litter the trading floor at the Chicago Board of Trade (CBOT). Sweaty men in bright yellow, blue or red jackets walk around, seemingly oblivious of the debris beneath their feet, waving their hands, shouting and scrapping over futures contracts for soybeans, pork bellies or wheat.

Here, in the trading room of the world's largest commodity futures exchange, decisions are made about the prices of food -- and, by extension, the fates of millions of people. Those decisions affect both hunger on the planet and the wealth of individual investors.

For Alan Knuckman, there is hardly a nicer place than the CBOT trading floor. "This is capitalism in its purest form," the commodities expert raves. "This is where millionaires are made." The 42-year-old's face shines with a boyish glow -- perhaps because he has never stopped playing.

Knuckman arrived here 27 years ago, and quickly advanced from his first job as a runner in the trading room to a trader. He worked for brokerage firms, soon established his own firm and is now an analyst with Agora Financials, a consulting firm specializing in commodities investments. He also writes a newsletter that offers investment tips. "I trade in anything you can get in and out of quickly," he says candidly. "I'm here to make money."

And if some here dont think this impacts them, look on your kitchen shelves, look in your freezer, and recognize you're paying more now for smaller packages of food.

Given the drought, overpopulation, overfishing, and overfarming since I am surprised food prices are as low as they are.

There are powerful forces in this world with a financial interest in the chaos and calamity of hunger, drought, pollution and preventable sickness. It's nauseating to contemplate, but Mr. Knuckman is one of thousands who gleefully makes money off of other people's misery.

The twin questions are what can be done about these merchants of misery, intertwined as they are in the global financial markets, and what will we do? The panic speech always begins with "But investors will lose money! And your investments will lose money, because willingly or not, you are invested in these reprehensible schemes." It's pretty easy for investors to see that people are starving, but that's in other parts of the world. Your choice then becomes if you feed those other people whom you don't know and who live far away, you run the risk of starving yourself. And so you justify participating in the system set up by the likes of Mr. Knuckman for his personal gain.

Have I mentioned lately how much I hate these motherfuckers?