Dear Friends,
Commodity prices, like food and Fuel, are on a long term upward trend because;
Close to two billion people in China and India, until now, have had to find a stick, sharpen it on a stone. Then use the stick to scratch a furrow in some rocky dry soil. Drop in a few, gnawed on, seeds and pray that an armored division doesn’t roll through the garden. That was the way they subsisted.
Now some of them have jobs and more are getting jobs. When you have a job, before you get a plasma TV, you get a bite to eat. Maybe a chicken pot pie. As people join the world economy those people are entitled to an ever increasing standard of living. Anyone who would begrudge a better standard of living to the workers of the world is a unmitigated equine’s rectum.
Now the world economy must provide the sustenance that is required for the workers that once subsisted on nothing. As more people join the planetary workforce the needs of those workers must and will be met. The old paradigm of looking to ones own county for food is getting less and less important.
When Britain used food as a weapon in the first world war it was the normal way of conducting war. In fact, that is the way Hitler justified invading the Soviet Union. “Germany has a RIGHT to feed itself!“ was Hitler’s justification. Drang nach Osten. Today however, we meet the supply needs of our enemies. Allowing the enemy to shoot at our children as they feed the children and wives of the people shooting at our children. Making the need to have ones food supply in country superfluous.
The best way to meet the needs of the new workers is to turn to Capitalism and the global economy. There are smart people all over the world. As they plug into the world economy their productive capacity will be available to the world economy. Ideas will flow freely and our needs, as people, will be met with increasingly lower unit cost and greater production, until equilibrium is met. That is the fundamental force of Capitalism. Where there is a need, there is a profit, where there is a profit, Capitalism will meet the need. Especially in basic commodities like food and energy that naturally foster perfect competition among suppliers.
The best way to short circuit this natural trend is to implement some poorly designed governmental regulation distorting the marketplace and creating friction to meeting the needs of the worlds workers. In this case the action of one nation effects the rest of the nations. The larger the nation the greater effect… Most nations, at this time, on Earth have regulations that distort the commodities markets.
Governments and poorly educated people want protectionist regulation. When that regulation inevitably leads to the needs of the people not being met the knee-jerk reaction of those same people is to point the finger of blame at the Market.
Someone needs to tell the governments of the world that when you point at someone else… there are three fingers pointing back at you.
