How Banksters Helped Cause Egypt Revolt

I have heard progressives wonder why Americans are not in the streets like Egyptians, demanding a redress of grievances against corporate plutocracy.  Perhaps the reason is that an average American spends 10% of our income on food, but an average Egyptian spends over 50% on food.  In Egypt, the price of food has doubled.  The problem is Wall Street.  Wherever Wall Street speculates, they create bubbles.  Examples include the dotcom bubble, the fuel bubble and most recently, the real estate bubble, whose collapse brought on the Republican Recession.  Since they trashed the housing market, Banksters have refocused their attention on commodities.  Some speculation provides the liquidity the commodities marked needs to operate, but before the GHW Bush administration did away with position limits at the request of Goldman Sachs, Banksters were prevented from the excess speculation that has raised world food prices.  Speculator profits account for over 50% of the cost of food, and there are more commodities contracts than there are commodities, so food prices will remain unstable, and hungry people are angry people.

Economists and experts in food security have warned repeatedly in recent years that an unbridled rise in food prices could trigger the very kind of explosion of citizen anger that’s now threatening to topple the Egyptian government. Such anger is likely to rise elsewhere, too.

A large nation with lots of desert, Egypt must import more than half of its food supply. Since 2008, there’s been sporadic unrest there as the cost of staples, from bread to fruits to vegetables, has gone up steadily.

One of those warning about the food prices was Hamdi Abdel-Azim, an economist and former president at the Sadat Academy for Social Sciences in Cairo.

"If the rise in food costs persists, there will be an explosion of popular anger against the government," he told the IPS Inter Press Service in mid-November.

A few weeks earlier, political opponents of President Hosni Mubarak had rallied to protest rising prices and to demand price ceilings on products to protect Egypt’s poor.

Soaring food prices aren’t the only reason that Egyptians took to the streets to try to topple their long-serving president. But they’re a significant factor, and a steady surge in global commodity prices reminiscent of 2008 is sure to bring new battles over food security this year.

Protests against food prices recently rocked Jordan and Algeria. These same rising prices were partly why Tunisia’s strongman, Zine El Abidine Ben Ali, fled his nation in mid-January. India and China are navigating the difficult waters of trying to control rising prices in their populous nations.

In the trading pits of commodity markets, the buzz is that many poor nations are trying to hoard wheat, corn and other staples. Such stockpiling has added to the bullish sentiment that’s driving commodity prices even higher… [emphasis added]

Inserted from <Vancouver Sun>

Ed Schultz explained this issue yesterday, and interviewed Dylan Rattigan:

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That makes two things crystal clear to me.

First position limits must be reinstated to insure that the price of commodities reflects their actual market value, not their speculative value in Bankster Millionaires Casino.

Second, unless broken up and heavily regulated, Banksters, enabled by their Republican lackeys, will destroy whatever they touch.  They must be muzzled.