Goldman Sachs Denies Links to Global Food Crisis 7/20

Discussion in 'Economy' started by hvactec, Jul 20, 2010.

  1. hvactec
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    hvactec VIP Member

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    A London-based non-profit agency is accusing Wall Street firm Goldman Sachs of manipulating commodities markets and driving up the price of food, but Goldman says the charge is "disingenuous and downright misleading," The Daily Telegraph reported.

    The World Development Movement launched an on-line campaign "to persuade the public to report Goldman to the Financial Services Authority (FSA) as the biggest bank allegedly distorting commodities markets," the U.K.-based paper reported.

    WDM organizers told the Telegraph they want to see the ability of banks and hedge funds to trade in commodity futures limited. The organization recently published a report called "The Great Hunger Lottery: How Banking Speculation Causes Food Crises," which alleges that banks and hedge funds "gamble on hunger."

    Goldman Sachs calls the report "horribly misinformed on a number of fronts."

    "The overwhelming majority of our activities in commodity markets are on behalf of clients and the profit estimates in the report are ludicrously overstate," Goldman Sachs spokesman Michael DuVally told Slashfood in an e-mail.

    "Research by respected international bodies like the OECD demonstrates clearly that long-term trends, including increased meat consumption by the growing middle class in the emerging markets and the increased use of biofuels in the developed markets, have created a backdrop for global food shortages. Our own research supports those findings," the company said.

    "We have repeatedly said that we support effective reform. Our lobbying effort is designed to achieve reform that will continue to allow producers to hedge their risks so that consumers get the benefit of greater price stability. To suggest otherwise is disingenuous and downright misleading."

    The report says that money spent on commodity index funds and derivatives grew from $46 billion in 2005 to $250 billion in 2008 and that the influx of cash drove up food prices around the world, particularly in developing countries, the paper reported.

    High food prices caused rioting around the world in 2007 and 2008.

    Read more: http://www.slashfood.com/2010/07/20/goldman-sachs-denies-links-to-global-food-crisis/
     
    Last edited: Jul 20, 2010
  2. Mr. H.
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    Mr. H. Diamond Member

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    Good retort by GS. :thup:
     

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