Tuesday, June 26, 2012

Speculators will starve the poor

This report highlights an issue for me: how to preserve the value of my savings without hurting other people?

Agricultural funds are, I think, a step too far, though the returns will of course attract other investors.


Sobers said...

Its not the people who are investing in these funds, or in land, who are starving the poor. Its the politicians who are debasing the currency in order to buy votes who are doing so. The stuff going up in value is the stuff the politicians can't create more of at the touch of a button.

To some extent (in the West at least) its a circular thing - politicians offer the masses free stuff (health care/benefits/education/State jobs etc ) in order to get them to vote for them, paid for by someone else. That's the wealthy to start with, and then as the tax revenues to pay for the bread and circuses need to rise, the taxes slowly drop down through society until everyone, even those on minimum wages, are taxed to the hilt. Then they borrow money from the future to keep the spending going, then when the borrowing runs out, get the taxpayers of another country to bail them out (as Greece, Spain, Portugal, Ireland, soon to be Italy etc). As a last resort they print money, which results in higher inflation which kicks the masses in the rear as higher food and fuel prices.

It all comes from offering too many people free stuff they aren't paying for. Eventually they do have to pay for it, just not in the way they might imagine.

Sackerson said...

Thanks for your lengthy and considered comment, Sobers. Who can argue against your point about bribing the people with their own money until it's all gone?

I'm concerned about the possibility that countries around the world will switch to growing meat for the Chinese rather than staple crops for their indigenous populace. This will sharply reduce the quantity of food calories per acre.

And as capital flows in we may see the use of fertilizers, pesticides etc to goose production and short-term profits, with a damaging effect on soil structure and ecological balance, ultimately exhausting and polluting the land.

Sobers said...

I keep banging on about it, but I think we are experiencing the rebalancing of global wealth. For the 50+ years post WW2 the West has become wealthier and wealthier, to the extent you can be born in a Western nation and from the moment you come into the world to the moment you leave it you can have been fed, housed, educated, treated for sickness, provided with income and cared for in your dotage, for zero input by yourself. The most self destructive personal habits (drink/drugs/tobacco/criminal activity) do not prevent you from being given any of this largesse. In fact you will get more of it because of your poor behaviour. You can literally do whatever you like and the State will ALWAYS take care of you.

Whereas in the rest of the world, people who do not work, do not eat. Drug addicts die in the streets, uncared for by anyone, because they have made their own beds, and must lie in them. It is the law of the jungle. You have to take care of yourself, because no-one else will.

What we are seeing is the slow (and not so slow in many cases) rise of the wealth of the developing nations, and the decline in the wealth of the developed ones. Some of that decline will be relative - they will grow faster than us, and catch us up. But some of it will be zero sum - as they get richer, we get absolutely poorer, particularly with regards to food and fuel costs.

There is nothing we can a) do about it or b) morally should do about it. We have had more than half a century on the hogs back, now we have to accept it is the turn of other poorer folk overseas to gain some of the benefits we have had for over half a century. We will not be returned to medieval living standards, or Victorian ones, or even the 1950s. Most likely the 1970s/80s, where people could afford a car (just), a holiday per year, and live basic lives, not ones influenced by mass consumption as in Hello magazine.

By all objective criteria its not the end of the world. But it will come as shock to many.

Paddington said...

Cases of good scotch and legal drugs?

Sackerson said...

For fun, or as investments?

Paddington said...

I was thinking trade goods, when it all goes South.