http://www.youtube.com/watch?v=LGBM4WngZT4 Although much has been said about the cultural and political implications of the Arab Spring, the uprising in Tunisia was largely economic due to rises in bread prices caused by bread speculation. More often than not, revolts are more about economic desperation than political aggravation or religious "awakenings." Speculative markets are already recognized as the cause of much market instability, but food speculation is often the most disrupting. The video above goes into greater detail about the craziness of it all. It begs the question: How do you restrict speculative markets from causing things like revolts and crashes when they are international in nature? Currently, the US is the base of operations for the most significant speculative markets, both in NY and Chicago, but if we restricted ourselves, other nations might simply increase their own involvement in it. It also makes you wonder if part of why we're a target for terrorism is purely economic rather than a matter of our interventionism militarily. We cause a lot of suffering just by destabilizing things like bread prices.
The minute the assclown said bread specualtion I knew he was an ignorant gomer. The specualtion isn't in Bread it is in grains wheat ryeand oats among others, that are used to make bread which anyone with a clue would know.
How far did you watch? They go over the specifics on the type of wheat that is most significant in Tunisian consumption.
Anmd one suspects that a lot of the specualtors in Tunis were those trying to make sure their families had enough to eat.
With the estimates for mine-able phosphates being what they are, a child born today may see commercial agriculture fall the the waste basket before they die.
The suggestion in the video is that speculation caused the crisis. Given the way futures operate, I find it hard to disagree.
Speculation doesn't cause crises. The best and worst you can say about speculators is that they try to find a way to benefit from bad economic policies established by governments. Further market volatility has to exist in order for specualtion to occur.
The subsidization by the Tunisian government might not be the best policy, but without it, the crisis would have only been worse. Speculation doesn't operate with a dependency on government intervention. It's a purely market based mechanism, so it's kind of hard to blame government for its overall effects. In an environment with no governments subsidizing commodities, speculation would still make life rough for the poor and the developing world in general -- if not worse.
