Get ready to starve. That is what will happen if President Sarkozy and the rest of the EuroWeenies (including the ones who live in the US) get their way.
There is one axiom that is true no matter what. There is no amount of scarcity that cannot be made worse by government regulation.
(Reuters) – French President Nicolas Sarkozy called in a speech laying out his G20 agenda Monday for new rules to curb commodity price volatility, warning that the world risks food riots and weaker growth if leaders fail to act.
Speaking to 300 diplomats and journalists in the Elysee presidential palace, Sarkozy also voiced support for a tax on financial transactions, calling such a move a “moral question” but admitting the idea had many enemies.
“How can you explain that we regulate money markets and not commodities?,” said Sarkozy, who holds the rotating presidency of the Group of 20, a policy forum for the world’s leading rich and developing economies, for 2011.
Government regulation of commodity markets is the quickest path to starvation.
Uncle Milty (Milton Friedman) once said “If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand.” Amen.
Governments that control food prices must eventually control distribution as well. A government that controls food distribution controls the people for almost everyone will trade freedom for bread.
January 24, 2011 at 4:15 pm
buy local from organic sources= problem solved
January 24, 2011 at 4:15 pm
Stories like this make me really glad I live near where the food GROWS! If price controls mean it's not cost-effective to ship it, they'll grow less, but they'll also still sell it in town where the price of gas doesn't enter into things!
Fortunately, I don't think price controls would make it through Congress….
January 24, 2011 at 4:25 pm
If taxes were lower, we could buy a house with 1 or 2 acres. The world is big enough for most people to have an acre- that's big enough for a big garden and green house, chickens and a pig. Every third family could have a cow. I would love it! But for now- we live in a 300,000 townhouse
January 24, 2011 at 5:23 pm
Land is worthless if you have no water– between the EPA, random environmentalists and the endangered species act, it's incredibly easy to have your land stolen while you still hold the all the paperwork. (and tax liabilities)
Check out Klamath Falls. They claimed to be protecting the suckerfish in the irrigation ditches, ignoring that shutting down irrigation made the water level rise and nearly wiped out said fish… but amazingly, a relative of the guy in charge happened to show up and buy the farms that went out of business. Isn't it amazing?
The local and organic thing is a crock. "Organic" is a huge step backwards, ignoring the amount of pesticides they can use by spraying lower amounts more often.
January 24, 2011 at 6:31 pm
The last time there was real price volatility in commodities was between 1971-1981. In the aftermath of Vietnman and the Great Society enactment, foreign investors questioned the worthiness of the US Dollar and demanded that thier gold backed securities be redeemed with gold. Of course, we didn't have near enough gold, and with the stroke of the pen, Nixon took us off the gold standard and floated the dollar. Overnight the prices of wheat, beans, corn, and oil spiked. The Great Inflation (which brought on Stagflation) began.
Right now, between the weakness of both the Euro and the Dollar, investors are searching for safer harbors; this isn't a demand spike per se, as many of the investors live in Hong Kong, and Shanghi. This is a flight from weak currencies to something more solid. Hence, commodity speculation. To aggrevate things even worse, short term interest rates are negative. That is, an institutional investor can simply borrow a sum of money form Treasury and do nothing. The spread between inflation and what the Treasury charges is such that the investor would make money due to the falling dollar. Risk, therefore is 0. And when risk is so low, investors tend to make bigger bets, more outrageous short sells, and other types of trades that can spell all kind of trouble for longer term investors.
But speculators tend to be quite conservative if there is a price risk associated with thier trades. The kind of breathtaking short sells that John Paulson took in 2007 normally don't occur very often. And short sellers play a valuable if not very risking game. They often send important signals to investors that all is not right in Denmark.
And yes, the regulating of our commodities markets is even more dangerous to people than price volatility. As stated above, if you don't like the inflation at the grocery store, take it up with Bernecke, Geithner, and the President. Speculators are only reacting to events set in motion by our highly credentialed experts and overseers.
January 24, 2011 at 11:10 pm
Obama's Czar Cass Sunstein has written 35 books to give animals civil rights to sue in court. It is a conscious and concerted effort to gain a stranglehold on all livestock and the food industry in the United States… and I believe Obama will succeed, better than Stalin. Stalin's police broke into your house and ripped up floor boards to find any preserves. If Obama can refuse medical aid to babies who survive abortion as he has, why would one believe he will care about other citizens?
January 27, 2011 at 1:57 am
So, long lines for bread?