By turning basic necessities like food into speculative assets, Barclays has been able to extract over $540 million from meal-seeking suckers the world over:
Barclays could be making as much as £340 million a year in profit through gambling on the price of key commodity crops like coffee, sugar and wheat, the Ecologist has learnt.
By creating funds to allow investors to speculate on the price of food, in the same way they would invest in the shares of a company, Barclays and others are able to bet on the price of food. However, food commodity trading is leading to higher and more volatile prices, say campaigners, which affect poor families in the less industrialised world the hardest as they can’t afford basic foods and also make it more difficult for farmers to plan and invest.
Barclays and other investment banks have been responsible for pushing tens of millions of people into poverty:
A World Bank report in February showed an extra 40 million people had been pushed into poverty as a result of rising food prices since June 2010...
‘Barclays are proud to be the UK’s number one food gambler,’ says WDM food campaigner Heidi Chow. ‘They are not only making large amounts of profit from pushing up food prices but they are also actively finding new ways for other financial institutions such as pension funds to further flood the food markets with speculative cash, making a serious situation even worse.’
...Investment banks are notoriously secretive about the revenues and profits they make from commodity speculation although US investment bank Goldman Sachs was estimated to have made more than $1 billion from commodities trading in 2009.
The devastation wrought by the global commodities bubble may dwarf that of the housing market:
By now, you probably think your opinion of Goldman Sachs and its swarm of Wall Street allies has rock-bottomed at raw loathing. You're wrong. There's more. It turns out that the most destructive of all their recent acts has barely been discussed at all. Here's the rest. This is the story of how some of the richest people in the world – Goldman, Deutsche Bank, the traders at Merrill Lynch, and more – have caused the starvation of some of the poorest people in the world.
It starts with an apparent mystery. At the end of 2006, food prices across the world started to rise, suddenly and stratospherically. Within a year, the price of wheat had shot up by 80 per cent, maize by 90 per cent, rice by 320 per cent. In a global jolt of hunger, 200 million people – mostly children – couldn't afford to get food any more, and sank into malnutrition or starvation. There were riots in more than 30 countries, and at least one government was violently overthrown. Then, in spring 2008, prices just as mysteriously fell back to their previous level. Jean Ziegler, the UN Special Rapporteur on the Right to Food, calls it "a silent mass murder", entirely due to "man-made actions."