Food for fuel, not people

If you invest in a commodities fund, are you a speculator? According to the G-8's definition, apparently so. But even if you are, who cares? You're investing in the current climate to make bets about future supply and demand. No matter what the politicians tell you, the state of the commodities market has much more to do with them than you. It's time to call them on their organic fertilizer.

In a follow-up to last week's rant about the real role of speculators in the commodities market, I point to an excellent opinion piece by Adam Lerrick in Tuesday's Wall Street Journal. The lead is especially rich:

"Leaders of the G-8 nations are gathered this week in Toyako, Japan, to root out the culprits in a food crisis that has moved hundreds of millions from subsistence to starvation. They need look no further than an old group photo."

Lerrick's point, and one we made about oil "speculators," is to place the blame where it always belonged - with subsidies. As Lerrick writes, lobbies extort tariffs to block cheap food imports. Subsidies underwrite food exports at prices that destroy competitors in poor countries. Conservationists want land set aside and to pay farmers not to grow. And now green energy advocates push ethanol quotas and tax credits that divert food into fuel.

Read the whole thing at www.wsj.com.

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