Surprise, Surprise: Hedge Funds Are Driving Your Food Prices Up!

The official narrative that energy, food and commodity prices in general are rising, first of all because of China, and secondly because of Russia and its war in Ukraine has lost so much credibility and even established media are starting to break ranks with the propaganda. As this newsletter has documented in the past, hyperinflation of commodity prices started well before the war and it was driven by hedge funds moving liquidity from financial assets to commodities derivatives (cf. SAS 24, 41/21 et al).

An investigative team at the Dutch Lighthouse think-tank also recently documented how the current surge in food prices on the world market is a consequence of hedge funds speculation and not, as the mainstream claims, “Russia’s fault”. The Lighthouse report was prominently covered on the German Plusminus program (ARD channel) and by the Indian outlet The Wire.

“World food prices reached their highest levels ever in March. As millions more people face hunger across the world, speculators have flooded commodity markets in attempts to make a profit out of escalating prices”, notes Lighthouse in the presentation of their report.

“Following Russia’s invasion of Ukraine, international banks began profiling ways for retail investors to bet on rising food prices. On March 7th, as wheat hit its highest ever price, JP Morgan’s wealth management team published an article encouraging clients to invest in agriculture funds.

“In the first week of March, commodity-linked ‘exchange traded funds’ (or ETFs, which are open for trading to the public) received $4.5 billion in investment. By April, two top agricultural ETFs had attracted net investor investment of $1.2 billion – compared to just $197 million for the whole of 2021.

“As another food price crisis looms, with reports of the price of bread more than doubling in food insecure countries in Africa and the Middle East, we reveal how financial regulators bowed to powerful lobby groups by weakening curbs on excessive speculation that were proposed after the last crisis in 2008.”

The German Plusminus team, in reporting the Lighthouse findings, asked for a comment from the EU Commission, which wrote back on July 7: “In this insecure situation markets are very nervous and very volatile. We consider the behaviour of the markets in scarce supply situations and high insecurity as not exceptional.”

It is no accident that some truth on the real causes of commodity price inflation has come to light in the Netherlands, a country where virtually the entire population is revolting against the oligarchy (cf. below). What is missing, of course, is the solution: cut liquidity to the gambling economy through a Glass-Steagall bank separation reform and exclude non-commercial traders from future markets. This will instantly not only deflate commodity prices but also expose the bankrupt state of the global financial system. In order for the economy to recover, the next steps of LaRouche’s “Four Laws” then need to be implemented: national banking, credit for infrastructure projects and a new monetary and credit system (New Bretton Woods).