Johann Hari – How Goldman Sachs gambled with the world’s poor – and won
There are some smaller explanations that account for some of the price rise, but not all. It’s true the growing demand for biofuels was gobbling up much-needed agricultural land – but that was a gradual process that wouldn’t explain a violent spike. It’s true that oil prices increased, driving up the cost of growing and distributing food – but the evidence increasingly shows that wasn’t the biggest factor.
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Then, through the 1990s, Goldman Sachs and others lobbied hard and the regulations were abolished. Suddenly, these contracts were turned into ‘derivatives’ that could be bought and sold among traders who had nothing to do with agriculture. A market in “food speculation” was born.
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