Monday, May 26, 2014

Derivatives Schemes Shift from Grain to Cattle, Stock Market Speculation Drives Meat Prices Up Worldwide

The fix is in in cattle markets worldwide.

The ethically-corrupt deregulated derivatives schemes have shifted from grain to cattle.

Cattle prices have almost doubled in 2014, and we can expect prices to continue to rise - for a time, anyway. This will create higher beef prices in grocery stores.

After more than a decade of artificially-depressed cattle prices (via trumped-up reports of BSE or "mad cow disease"), that market was prime territory for parasitic derivatives action.

The Western Producer is reporting that meat prices are rising worldwide.

The only way meat prices would be rising all around the world at the very same time is through stock market speculation and derivatives trading. This is not related (at least not primarily) to supply and demand. Rather, it is the manipulated perception of supply and demand fueling speculation.

This same stock market speculation and derivatives trading have created spikes in grain prices worldwide since 2008, which in turn caused the starvation of hundreds of millions more people around the world who could no longer afford dietary staples.

From August 8, 2010: Ceres Direct in Sagittarius on Its Way to Pluto in Capricorn and Benefiting Financially From the Starvation of the People

"One of the things coming to light under this transit is how food has become part of the derivatives scheme, creating a massive speculation bubble based on wild gambling on agricultural commodities prices. In 2008, this speculation drove food prices up (wheat by 80 percent, maize by 90 percent, rice by 320 percent) driving 200 million more people into starvation.

Finance schmucks are gambling on the price of food rising which fuels rabid speculation. And as their money games and various manipulations cause food prices to rise unnaturally, people around the world starve, suffer horribly, watch their children and loved ones withering and dying - all to keep the scam going and the bucks rolling after the mortgage scheme crashed and burned...

A lot of things have been blamed for the rising cost of food - fuel costs, supply problems, overpopulation, cash crops, diverting food crops to create ethanol. These all contribute.

But a major factor, probably the major factor, not often mentioned is the derivatives scheme on food and resulting price jumps. It was really this that spiked prices to the point that 200 million more people could not afford to fill their stomachs. This was the basis for the 2008 food riots in 30 countries. Haiti, Mexico, Egypt, Bangladesh, Mozambique...

When Haitians were eating biscuits made from clay and lard to stop their gnawing hunger, they had these speculators, their clients and the people who allowed (and continue to allow) the deregulation of the financial system to thank...

From an article by Johann Hari "How Goldman Sachs gambled on starving the world's poor - and won":

"Here's how it happened. In 2006, financial speculators like Goldman's pulled out of the collapsing US real estate market, and they were looking for somewhere else to make their stash of cash swell. They started to buy massive amounts of derivatives based on food: they reckoned that food prices would stay steady or rise while the rest of the economy tanked. Suddenly, the world's frightened investors stampeded onto this ground and decided to buy, buy, buy.

So while the supply and demand of food stayed pretty much the same, the supply and demand for contracts based on food massively rose - which meant the all-rolled-into-one price for food on people's plates massively rose. The starvation began.

The food price was now being set by speculation, rather than by real food. The hedge fund manager Michael Masters estimated that even on the regulated exchanges in the US - which take up a small part of the business - 64 percent of all wheat contracts were held by speculators with no interest whatever in real wheat. They owned it solely to inflate the price and sell it on."

Once the mortgage scam collapsed, the ticks had to go looking for a new dog. They found one with our food supply. These speculators bet on the price of food rising, and the higher the price of staple goods like wheat, rice, corn, soybeans, the bigger the profits for the speculators and their clients...

By artificially inflating food prices through speculation and manipulations of supply, the price for the crop no longer has any relation to what it is worth in a real-world marketplace - or to what people can pay. There is no consideration of the fact that these are staples that people need to live.

As is generally the case these days, there is a "get yours while the getting's good" ethic. This is a parasitic system that has been designed to collapse after the speculators have made their money and drained their host. The fact that they are playing with people's lives never enters the equation."

Media manipulation plays a large role in the stock market speculation game.

A heat wave in the United States Midwest in summer 2012 fueled media reports of crop failures, particularly for corn. These media reports created a surge in corn prices (paying off for speculators) based on the expectation of shortages, despite the fact that total corn yields that year were still expected to be 9.5% higher than the previous year.

From July 18, 2012: Ceres in Gemini, the Heat Wave, and Media Manipulation of Grain Futures

"The truth is, the media is manufacturing cause and effect.

Crop failures of this magnitude will not create an immediate rise in the price of food and groceries. The world has grain and food stores in reserve. No matter how devastating the current corn crop loss in the U.S., no matter how the reserves may potentially take a hit, the early failure of a crop - long before it is time to harvest and sell - will not cause an immediate rise in food prices. As far as the physical supply is concerned, it would require a longer-term trickle-down effect.
What a major crop failure will create, with the media's help, is an immediate psychological state among the public and among those playing the stock market that will create higher prices. This is a psychological bubble, an expectation that prices will rise, which creates that very effect.
The primary driver in stock markets around the world these days is not the supply and demand of physical commodities. It is mass psychology and the manipulation of that mass psychology, often through media. If people believe the price of something is going to go up - due, in this case, to media reports of heat and drought causing crop failures in the U.S. Midwest - they will be primed for price increases. They will act as if the price is going to go up, buying and selling accordingly, and this activity will then drive the prices up, no matter if the physical supply is in imminent danger of being decreased substantially or not...

There are two major groups using grain futures contracts: hedgers and speculators.

Hedgers are people or groups involved in the actual physical product - farmers, grain processors, elevators, grain handlers, etc. Hedgers are protecting themselves from adverse price fluctuations in a physical product they deal in. In other words, their business is the buying and selling of actual grain, at whatever level.

Speculators, on the other hand, have no use for the commodities in which they trade. Their business is in the buying and selling of futures contracts themselves. Speculators bet on the price of grain rising and falling and hope to make a profit on short-term movements in the prices. Day trader speculators may flip-flop their positions between buyer and seller of futures contracts several times per day. Scalper speculators may change positions every 10 to 15 seconds. None of these people has any connection to or interest in food, grain, or agriculture.
The original idea behind a futures market for crops was for hedgers - a hedging of investment for farmers and others directly involved in agricultural production.
As part of that, a farmer could agree to sell his crop in a future month at a certain price, thus locking in a price. If the prices dropped before he sold his crop, the contract ensured he would still earn the agreed upon price, thus hedging his investment of time, money, and energy. If the prices rose before he sold his crop, however, he may take a loss. Farmers, unlike speculators, cannot get out of futures contracts once they have agreed to deliver their physical product on a certain date for a certain price.
Grain processors who make major purchasers of grain, unlike farmers who are selling their grain, would hedge their purchases against price increases rather than price drops, also locking purchases in in a futures contract.
Because of a fairly criminal level of deregulation in the derivatives markets, kicked into high gear under the presidency of Bill Clinton in the late 1990s, people who have no stake in agriculture at all - Wall Street suits who have never gotten a speck of dirt under their manicured fingers - can now buy and sell grain futures contracts with few rules, upselling them to someone else who then upsells them to someone else who them upsells them to someone else, etc.  

Due to this deregulation, paving the way for the entry of scores of speculators, only about two percent of commodities futures now end with a real exchange of goods. 
Speculators are able to play around in these futures contracts by paying a small fraction of the total value of the physical product, called a margin. In comparison to other markets, grains have a lower margin, making them more easily accessible to speculators. In other words, it requires less money to get into the grain futures market and represents a lower risk than other commodities markets.
The speculation is fairly simple. A speculator who has purchased a futures contract on corn for $2.50/bushel but then sells it at $2.60/bushel will make a profit. 

If there is a great deal of speculation going on and grain futures contracts become the hot ticket (ie. because people have stampeded into that market and there is certainty that the price will rise due to heat wave-related crop losses), the prices are driven up through demand for those contracts, not in any real relation to physical product...

Weather and growing conditions are the biggest factors in the growing of grain - and in the perception of supply and demand. As one can also see, adverse weather conditions resulting in crop failures and the expectation of shortages and price hikes are also of benefit to speculators in the current market.
Floods, droughts, excess heat or cold, and hailed-out crops create some decrease in supply, there's no doubt about it. But, again, it is the perception fed through media that grain prices are going to go up or down, more so than increases and decreases in physical supply, that drives the market.

For the past three years, we have seen crop failures around the world via intense coverage in global media.
In 2010, under a Grand Cross involving Jupiter-Uranus in Aries, personal planets in Cancer, Pluto in Capricorn, and Saturn in late Virgo, Pakistan's breadbasket was absolutely devastated by flooding. The Canadian grain- and livestock-producing prairies experienced wind storms, hail, and flooding, resulting in crop damage and failures. And severe drought and wildfires in Russia destroyed half its wheat crop.
In 2011, under a Cardinal Grand Cross involving Uranus in Aries, Pluto in Capricorn, Saturn in Libra and personal planets in Cancer, parts of the Canadian prairie provinces were flooded again, resulting in more crop failures. The U.S. state of Texas experienced severe drought that damaged two-thirds of the state’s wheat crop and resulted in a mass selloff of cattle due to lack of feed.
This year, just as the first Uranus in Aries - Pluto in Capricorn square became exact June 24, the heat wave swept in across most of Canada and the United States, creating crop damage and failures.
Still, these failures were and are the exception rather than the rule. The world is still producing massive amounts of grain and food. These failures would not create the types of immediate price spikes we saw in wheat prices in 2010-11, for example, unless media-driven psychology were affecting the markets.

Though crop-destroying (un)natural disasters are often blamed solely on global warming, we are experiencing a grand-scale programme of weather modification via HAARP apparatuses, chemtrail spraying, cloud seeding, and other methods. 

In 1977, a treaty prohibiting the use of weather warfare was opened for signature, coming into effect in October 1978. This treaty was brought about in Geneva during a United Nations General Assembly at the Convention on the Prohibition of Military or Any Other Hostile Use of Environmental Modification Techniques. Weather modification techniques and their use in warfare were on the global radar screen in full force by the late 1970s. To doubt the availability and use of these techniques at this point would be na├»ve. 

Unnatural disasters create shortages, and the media coverage of them creates the perception of many more. The weather modification, violent weather, and unnatural disasters resulting in crop failures work to benefit agribusiness corporations and their shareholders, as well. Genetically modified seeds are now being marketed aggressively as producing greatly higher yields (untrue) with the ability to withstand the extreme weather blamed on global warming but more directly linked to ongoing weather modification...

All this is going on against the backdrop of the Uranus in Aries - Pluto in Capricorn square series, the first time Uranus and Pluto have squared each other since the Great Depression...

In the same way that speculators and credit-default swaps in the U.S. mortgage industry led to an inflation bubble (with predatory mortgages and an eventual timed collapse), speculation in grain derivatives is creating a scenario of inflated prices with little-to-no connection to the physical products. This creates a wildly unstable marketplace."

This wildly unstable marketplace with little connection to physical products has now been extended to the cattle markets. Speculators have moved in on global cattle markets, and this will cause the price of beef to rise dramatically for a period of time - until the ticks move on to a new host.

These are the Pluto in Capricorn years when basic human needs like housing and food are at the mercy of highly-manipulated "free" markets that have little-to-no connection to the commodities they are making their fortunes on, to the people who produce those commodities, or to the people who need those commodities to survive.

Humans suffer, all life suffers, from unethical stock market insanity and greed.

Take this into consideration when choosing your own investments.

If beef is a part of your diet, now is a good time to find a local, independent beef supplier who will (hopefully) not be as affected by these stock market wranglings.   

6 comments:

Lea said...

Outstanding reporting. Thank you. It has gone to WW, FB, Google + and Twitter. xo

Willow said...

Thank-you, Lea. Thanks for sharing it.

Leslie P. Polzer said...

Did you make these photos? They're lovely.

Willow said...

Yes, I did, Leslie. Thanks! I'm just about to start selling my photography.

Ruth said...

Agreed. This is the best and most hardhitting report on the ghastly state of commodification of our food supply I've read yet. Right on sister

Greg F said...

Thanks for this, Willow. Very informative if a bit depressing. Keep fighting back!