A new report released by the United Nations blames the “herd” mentality of investors and poor regulation for volatile commodity prices, suggesting new global “transaction” taxes on trading and more international government involvement in controlling markets as possible solutions.
The whole "study" reeks of arrogance and can hardly be considered objective. The authors, for example, consistently blast investors' "herd behavior," absurdly suggesting that wise global regulators would be able to make markets function more efficiently — if only international institutions had more power. The paper even refers to “tighter regulation of financial investors” and “broader international policy measures, including price stabilization schemes” as needs.
Produced by the UN Conference on Trade and Development (UNCTAD) with support from the Chamber of Workers Vienna, the study — entitled “Price Formation in Financialized Commodity Markets” — focuses specifically on oil, barley, cocoa, maize, sugar, and wheat. After some analysis, the paper begins by attacking the way commodities markets operate. It essentially claims that naïve and greedy “speculators” pursuing quick profits have produced a massive “bubble” in commodities — particularly food and oil — that must now be popped by government to save the poor.
Of course, most economists attribute rising commodity prices to wild money printing and inflation by central banks; uncertainty resulting from reckless fiscal and monetary policy; banking-cartel manipulation of markets; and a genuine increase in demand or decrease in supply. But the anti-capitalist UNCTAD disagrees, holding dysfunctional markets and a lack of regulation responsible instead.
