Banking Giants Profiting from World Famine and Energy Shortages Despite the fact that Russia’s conflict in Ukraine has caused devastation to international commodity markets, increasing the cost of gasoline and food and worsening the global hunger problem, new statistics suggest that the turmoil has been a significant bonanza for commodities traders on Wall Street.
Russia’s aggression against Ukraine has caused widespread disruption in commodities markets, leading to higher prices for essentials like gasoline and food and contributing to a worsening of global food security crises.
While this mayhem has been catastrophic for the world’s poor — multitudes who are on the verge of starvation — it has been a godsend for Wall Street titans, with fresh statistics indicating the world’s 100 biggest banks are on track to break commodities trading revenue records this year.
According to data compiled by London-based consultancy Vali Analytics, “the 100 largest banks by revenue are poised to generate $18 billion of commodities trading in 2022,” Bloomberg reported last week. That would be higher than the previous record high set in 2009, and the biggest in the 14 years of data that we have.
According to Bloomberg, this forecast “is the latest indication that the dramatic fluctuations in energy prices driven by the conflict in Ukraine are providing a benefit to commodities speculators, even as they plunge European countries into trouble.”
According to Vali, an analytics organization that monitors the trading industry, the top 5 commodities trading banks are Macquarie Group Ltd, Goldman Sachs Group Corporation, JPMorgan Chase & Company, Citigroup Corporation, and Morgan Stanley.
Based on the United Nations Food and Agricultural Organization, millions of people are at risk of going hungry since the price of wheat and many other food essentials has declined from its peak but remains much higher than it was this time last year.
Based to projections made by the World Food Programme, “as many as 830 million people go off to bed without dinner every night,” and “the number of individuals experiencing severe food insecurity has increased — from 84 million to 355 million since 2019.”
The high cost of living in Europe and elsewhere has been exacerbated by the gradual but persistent increase in energy costs.
In reaction to Bloomberg’s article, a researcher at Lund University’s Center for Sustainability Studies, Salvatore De Rosa, tweeted, “People’s agony produces capitalists’ superprofit.” “What can be done to change this?”
It is widely believed by experts that Wall Street banks not only reaped financial benefits from the rises in commodity prices but have also contributed to their creation.
Speculators are “pushing up prices,” Michael Greenberger, the former chairman of the Division of Trade and Marketing at the U.S. U.s. Securities And Exchange Commission, informed Mongabay in July.
According to Greenberger, “commodity markets are meant to serve as hedging markets for those actively trading in the underlying commodity.” People who grow wheat and those who purchase wheat, in this example. But if we took a closer look, we’d see banks that couldn’t care less about the cost of wheat writing swaps and manipulating the market.
It’s “too tempting” to blame demand and supply for rising costs, as Greenberger put it. “It’s too simple to argue that the conflict in Ukraine has skewed all these markets,” he said. According to my current projections, unrestricted speculation accounts for at least 10 percent of the total price.