A new study on the link between financial speculation in commodity markets and food-price spikes shows that the model can be used to predict future food-price spikes, strengthening the case that financial speculators (fleeing the collapse of the housing market) art the root cause of the violent food-price swings that have been blamed for global starvation, riots and political instability.
The new paper -- M. Lagi, Yavni Bar-Yam, K.Z. Bertrand, Yaneer Bar-Yam, UPDATE February 2012 — The Food Crises: Predictive validation of a quantitative model of food prices including speculators and ethanol conversion -- was produced under the auspices of the New England Complex Systems Institute.
In the new study, predictions made by the researchers’ original model are compared to actual food prices between March 2011 and January 2012. Placed on a graph, the lines match closely, and do so despite spanning a major change in price trends at the last bubble’s peak.
“If you have a straight line, extend it and say, ‘Aren’t we predictive,’ it doesn’t give that much confidence,” said Bar-Yam. “If it changes direction, that’s a much more severe test of what’s happening.”
Both the European Union and United States are now considering whether and how to limit commodity speculation. In the U.S., such limits are required by the Dodd-Frank Act, but have been fiercely resisted by the financial industry.
It’s expected that the U.S. Commodity Futures Trading Commission will enact speculation limits by the end of 2012, though they might still be blocked in court. But even if the rules pass, they’re arguably weak, focusing on “position limits,” or caps on the maximum number of contracts a single speculator can hold. The rules won’t won’t prevent markets from being overwhelmed by speculation.
(But what's a little starvation and global upheaval when compared against the miracle of "enhanced liquidity"?)
Speculation Blamed for Global Food Price Weirdness
A scrap dealer cleaning out a deceased engineer’s basement in Pittsburg, Pennsylvania found two massive 1960s computers, magnetic tape data storage systems, and hundreds of tape reels, all of which was marked as the property of NASA. The scrap dealer called NASA to report what he found and the agency’s Office of the Inspector General […]
The Department of Agriculture’s chief scientist oversees more than 1,000 scientists in 100 research facilities: Trump’s pick to run the agency is Sam Clovis, a climate-denying talk-radio host who not only lacks any kind of scientific degrees — he didn’t take a single science course at university.
NASA’s Langley Research Center in Hampton, Virginia turns 100 this year. In celebration, the space agency produced this short documentary and enlisted Captain Kirk himself, William Shatner, to narrate. Here are just a few highlights from NASA Langley’s incredible history: • In times of peace and war, NASA Langley helped to create a better airplane, […]
Just because English has become the common global tongue doesn’t mean it’s the easiest language to write—even for native speakers. If you’re looking to improve your written communication skills, especially on your smartphone, take a look at Ginger Page.Ginger is a cross-platform app that offers corrections for phrasing as well as grammar. It’s powered by […]
The current web development landscape is rife with buzzwords and technology that gets abandoned almost as soon as it’s made. If you’ve never written a line of code before, it can be hard to figure out what’s coming, what’s here to stay, or how to get ahead.This Beginner Web Development Bundle is a great place […]
The Fader Stealth Quadcopter from TRNDlabs packs incredible flight performance into a package small enough to land on your phone screen, and it’s available now in the Boing Boing Store.The Fader’s six-axis gyroscope module gives it perfect balance in the air. This makes the onboard 720p HD camera all the better for shooting amazing flight […]