As the world's most vulnerable populations succumb to surging global food prices—driven in part by drought, climate change, and a global food system increasingly vulnerable to the whims of commodity speculation—Goldman Sachs has managed to turn the poverty and suffering of others into profits for itself.
Farmer Darren Becker sifts through arid topsoil under a ruined crop on the family farm on August 24 in Logan, Kansas. (Getty)
Pulling in more than $400 million in profits last year through risky and damaging food speculation practices, the Wall Street financial titan has once again profited from others' misfortune, The Independentreports Tuesday.
According to an analysis conducted forThe Independent by the World Development Movement (WDM), 2012 investment practices in the "soft commodities" trade (e.g. wheat and maize) by financial institutions such as Goldman Sachs, drove prices to unprecedented highs while bank profits increased and banker bonuses were handed out readily.
"While nearly a billion people go hungry, Goldman Sachs bankers are feeding their own bonuses by betting on the price of food. Financial speculation is fueling food price spikes and Goldman Sachs is the No 1 culprit."
Goldman's food speculation contributed to a roughly 68 per cent jump in profits for 2012, The Independent reports, while it increased the average pay and bonus package of its bankers to nearly $396,500.
Christine Haigh of the WDM stated: "While nearly a billion people go hungry, Goldman Sachs bankers are feeding their own bonuses by betting on the price of food. Financial speculation is fueling food price spikes and Goldman Sachs is the No. 1 culprit."The Independent explains:
As the global food crisis has worsened due to extreme weather brought on by global climate change, Rob Nash, Oxfam's private sector adviser, says the group is increasingly alarmed by financial food speculation.
"Especially in the light of increasingly extreme weather conditions which can reduce supply suddenly and severely deplete stocks," he said, the last thing the world's poor need is for that "volatility to be exacerbated by speculation and exploited for short-term profit."