Could Food Shortages Bring Down Civilization?

asks Unscientific American (and CP). The short answer is no. As you can find from the FAO, calories per day are going up, not down. [W]orld grain prices in the spring and summer of last year climbed to the highest level ever. says USciAm – but somehow can’t find space to mention that since then food prices have crashed to far below the 2008 average, and below the 2007 average, and remained stable in 2009. Now it took me 5 minutes and google to find that, can it be that Lester R Brown might be a teensy bit one-sided?

The new idea seems to be, if people won’t worry about GW for themselves, worry because it might cause food shortages which which will cause failed states which will causes terrists. Romm gives us a list of failed states, of which the top of the list is: Somalia, Sudan, Zimbabwe, Chad, Iraq, Democratic Republic of the Congo, Afghanistan. None of these are failed due to food problems. They are all failed due to cr*p government (which they acquired for one reason or another). Browns entire thesis is junk.

Next. Thanks to MW for pointing this out.

[Update: TT points out that I am in excellent company 🙂 -W]


* Early Warning
* Rising temperatures reduce global wheat production (Asseng et al., doi:10.1038/nclimate2470) but note warming is already slowing yield gains at a majority of wheat-growing locations.
* How overfed are we?

43 thoughts on “Could Food Shortages Bring Down Civilization?”

  1. If I came to you with a graph of global mean temperatures over the last 3 years claiming to have debunked global warming, you’d laugh, right?

    [Yes. And if you’d come to me in 2000, telling me that temperatures had spiked in 1998, tried to imply that they were still high, and then failed to mention they had declined, I’d laugh at you. What is your point? -W]

    The failed states list is kind of amusing. I think we all know that the old Afghan government didn’t fall due to a shortage of food but rather an excess of ordinance. However, Brown doesn’t say this. His point is that political instability puts food aid in jeopardy

    [No, that isn’t his point. How could it be? He isn’t interested in either -W]

    agree that in Somalia poor governance has preceeded recent food crises, although I suspect there are feedbacks – food insecurity tends to push noble aspirations of democracy and freedom to the back of the mind…


  2. With my pedant’s hat on, I must observe that if the question is “could food shortages bring down civilisation?” then the answer clearly must be “yes.” If the question were instead “are food shortages likely to bring down civilisation in the foreseeable future?” then the answer is “probably not.” With the obvious caveats about the severity of even fairly minor local disruptions if you happen to be on the sharp end of them…


  3. Andrewc may have been hoping to draw your attention to the fact that the seemingly restabilized ‘lower’ food prices remain around 40% higher than they were throughout the 1990s and beyond. Although the ‘stabilized’ period is too short to be meaningful, and they could easily fall further. Not trying to bat for either side on this, just saying that even though food prices have fallen they remain higher than before for now. Sorta like temps (though obviously only coincidentally). 🙂

    [Yes I agree the current prices are higher than the long-term mean. But I still think Brown is being deceptive in his description, by failing to mention the drop, he is deliberately giving a misleading impression -W]


  4. I’m given to understand that the amount of water required
    for food production is going up faster than the food production
    itself (no I can’t be bothered trying to find a reference). And if water becomes a problem, the food will be a problem … quickly.


  5. of course if we are forced to back to more primitive labor intensive food production techniques, food shortages are possible.

    luddites are the real danger


  6. Global Warming: a direct link to failed states. Ground based temp mesurements disappear due to emerging technology (remote sensing/satellite). This technology employs fewer people. Scientists lose jobs, become hungry. URBAN UNEMPLOYMENT leads to riots, which leads to failed states.

    Could have been just as likely a story, i would think.

    Solution – inefficient farming, leads to fuller workweek, makes people happy again.

    Downside – landuse change may lead to global warming.

    “the odds of reality are infinite, but it happens every day.”


  7. Crumbs, Dr Connolley, do you write these things just to be provocative?

    [No -W]

    Yes, food shortages could bring down what people regard as civilisation, as a consequence of migration.

    [Only if we actually run out of food, which doesn’t look likely -W]

    Pleased to see that you are reading the FAO reports : much more interesting than the rest. One of the interesting features is that the developed world has lots of spare capacity to increase production. Whether that can continue to feed all is a moot point.

    I think that you are being silly in grouping all the African states you list into one basket : clearly Zimb is a failed state because of governance but the Horn is probably not – more a case of too many in too small an area.

    [A bit like Holland, perhaps? Sorry, but whilst lack of food can obviously exacerbate problems, I don’t see evidence that even one state has been tipped into barbarism or whatever by lack of it -W]


  8. Let’s take a hypothetical scenario: a major drought in USA casues production to plummet making USA a large net importer of food. World market prices skyrocket but USA has the money (or rather the ability to borrow the money) to buy the food out of the mouths of poorer people in other countries. Those countries respond by banning exports to prevent uprisings.

    Now, in the best of worlds USA would simply reduce its consumption of food, but will it? The wrong President might just as well start military interventions “in order to restore capitalism and free trade”. From there the situation might degenerate.

    My answer to your question would be that given altruistic decisions by both leaders and the general population of the world food shortages are unlikely to bring down civilization, but a shortage does make bad political decisions more likely.

    It’s like the current financial crisis, if it ever happens everyone will say it was obvious it was going to happen, but in advance most people hoped for the best.

    [Any number of speculative scenarios might occur. You don’t really get many points for thinking of one. Do many people believe this is likely to happen? If they did, they would be buying food futures. I don’t think they are -W]


  9. As Eli recalls, there were a couple of years of reserve food stocks in the 1960s which have now been built down to a couple of months. This was an economic decision. As a professional worrier, that means that there is a serious danger mass starvation given something like a Tabora (sp?). Threats to the food supply from climate change are more likely to be longer term changes such as drought in the wrong places, which is why there is, among those who think, a call for breeding food plants which can handle higher CO2, warmer, dryer climates.

    Now be a good fellow and please comment on things where you have a clue.


  10. Not that I have an opinion on this subject but:

    “Do many people believe this is likely to happen? If they did, they would be buying food futures. I don’t think they are”

    Who tends to buy futures? No one I does. Aren’t the people who buy futures generally the same (sort of) people who bought soon to be worthless mortgages because they didn’t think that they were soon to be worthless? Or are they people who look beyond the next bonus payment?

    [Your point about mortgages is a good one. You are suggesting that food future might well be worthless, because the price might crash? You’re not showing great confidence in the prospect of food shortages -W]


  11. I think what Adam is actually trying to say is that you can’t use current investment decisions as a reliable guide to likely future outcomes, since we’ve just found out that the people making those sorts of decisions haven’t got a clue about the future of their own industry, never mind anybody else’s. To read his comment as implying a likely crash in food futures is just obtuse.

    [We can’t read the market decisions as a whole, no. We can read yours and mine and his, though. None of us (well, except me, who *has* bought some food related stocks) believe that the probability that food prices are going to be substantially higher next year, or the year after, is strong enough to bet on -W]


  12. William,

    If you take the house price boom, it was obvious to me that there was going to be a crash, but people who bought houses made a profit and proved me wrong until the bust happened.

    [Sorry. You get no points for saying that. There were any number of people saying that. You get points, and prizes, for saying “it was obvious to me that there was going to be a crash, so I shorted house prices and made a fortune” -W]

    It is the same with food futures. No one dares to buy them now because most people are like you and think that the price of food will not explode. In fact, as you pointed out, the price has come down over the last year. Where would my investment be now?

    [The price has come down because we aren’t short of food. If you think we’ll be short of food next year, you think prices are going to go up, and can bet on it. But when it comes down to it you’re not actually sure, so won’t -W]

    Meanwhile the bees are being wiped out globally, possibly by genetic crops. Without bees we have no pollinators and very much less food. We have passed Peak Oil, but we need oil for irrigation, fertilisers, and farm machinery. We can’t feed 6,500,000,000 people and rising without oil.

    [My bees are fine, thanks: -W]

    It is your type of blind faith that nothing can go wrong which has got us into this mess. Wake up and take those blinkers off.

    [Err, are you sure you’re talking to the right person? I don’t recognise me in that. Refusal to believe in fake catastrophes doesn’t mean I believe nothing can go wrong. -W]

    Cheers, Alastair.


  13. “You are suggesting that food future might well be worthless, because the price might crash?”

    No. I have no opinion on the subject.

    “You’re not showing great confidence in the prospect of food shortages”

    Well, food shortages generally don’t tend to give much to be confident about, do they?

    “trying to say is that you can’t use current investment decisions as a reliable guide to likely future outcomes,”

    I’m asking the question more than saying it, as I don’t know. I wouldn’t be surprised if a profit on a future can be made irrespective of the eventual outcome, and well within the its lifetime. It seems to be the way of these things.


  14. Alastair;

    I don’t want to downplay CCD, but despite the claims of Bee Movie bees are far from the only pollinators – and honeybees (afaik the sole species to be affected by CCD) have only a minority market share in the bee pollinator industry as a whole (though a significant one in agricultural pollination). As to the likelihood of GM being the cause… well, let’s not go there.


    I don’t see behaviour on the food futures market now as necessarily indicative. The recent trend in food prices has been downward – and potential investors may well be further declines in the short- to medium-term. That’s what I’d expect, anyway, purely because of the anomalous peak in 2008. If so, those putative investors will be waiting, no? They’ll want to buy when the market is at a low ebb.

    Another issue is that non-negligible risk does not equal bettable odds. There’s a non-negligible chance that 2009 sea ice extent will be record min – or at least it was non-negligible when you opened betting, it doesn’t look likely now! – but you’re betting against it because it’s an ouside chance.

    In any case, the whole ‘collapse of civilization’ question is a bit of a red herring. It’s unlikely that food supply problems alone will be critical, but so what? It’s unlikely that century-timescale climate change will be either, it’s unlikely that oil shortages will be, it’s unlikely that… You get the picture.

    Just as bee colonies are likely collapsing because of a combination of individually survivable factors (at least from what I read), if there were to be any major breakdown in civilization (whatever that means in a globalized world – and not that I think it’s a bankable proposition) it would likely be due to combinations of similarly individually survivable factors.


  15. “We can read yours and mine and his, though.”

    No, of those three we can only read yours. We can only read the beliefs of those buy futures, bets etc. Not of those who don’t.

    “food prices are going to be substantially higher next year, or the year after,”

    What about in 2030?


  16. If land and resources were diverted from feeding livestock, there would be considerable slack in the global food supply. I don’t think people are going to starve themselves (starve someone else, perhaps), for the luxury of a Big Mac.

    [See the linked-to “how fat are we”. People aren’t going to starve *themselves* for a Big Mac, but they will certainly starve other people for one -W]


  17. I just want to point out that authors publishing in Scientific American do not have editorial control over content, including title; also there appear to be length restrictions.

    That said, the article certainly reads as if Lester Brown wrote it.

    [I think that in this case, as usual, unless there is evidence that he has disowned it, he can be assumed to have written it -W]


  18. I don’t see how food futures are a useful predictor of potential short to medium term food shortages. Investing to profit from a bad event and investing to protect against a bad event are two distinct actions. Maybe people aren’t doing the first but they are certainly doing the second.

    [Argh! Sorry, I’ve explained myself badly. FF themselves may or may not be “good” predictors – I really don’t know how well they have performed in the past, or how they might perform in the future.

    But I’m not trying to say that, so it doesn’t matter.

    I’m trying to say that purchasing (or not) FF’s is a useful guide to how much an individual believes dire predictions of future food shortages. If you believe that dire food shortages are not far off, you should be purchasing FF’s. No? Unless you don’t like money, of course. Not everyone does -W]

    If I believe a significant risk of a bad event exists (lets say a 10% chance), then a simple cost-loss model would suggest investment to avoid the risk at a level of 0.1 * the cost of the event. Assuming the protective investment works, the risk is reduced, the event can be managed or the event doesn’t happen and we lost our money.

    [OK so far -W]

    Most of us ‘bet’ by investing either directly or by proxy through government in protecting against risk. The amount of support for initiatives like the Svalbard seed bank and other efforts to secure future food supplies would suggest that plenty of people believe there is a real risk.

    [No, I disagree. In the great scheme of costs, the Svalbard seed bank is so low cost as to be essentially free, and it provides some entertainment, so of course everyone is in favour. Besides which, people are pretty well resigned to the government spending money on things they would never spend their own money on. The test is what you do with your own money. Do you leave it on deposit, gathering negligible but safe returns? Or do you believe that your assessment of climate change is different to that of the market, in which case there should be opportunities to profit frm the difference?

    Sorry if I’m doing all this in terms of money. I don’t really believe that it is the end of all things -W]


  19. If I really believe dire food shortages are a risk, I could either:

    1. Buy food futures (your alignment has shifted 1 point towards Chaotic), or
    2. Work to avoid the risk (your alignment has shifted 1 point towards Good).

    I can’t succeed at both. If I invest in food futures then it is in my interest for food shortages to happen. The market’s assessment of the risk takes into account the expected work people will do to mitigate it.

    [Maybe it is a bad idea to personalise this; I’m really not talking about you, personally, but people who predict dire shortages from climate change in general. I’m pointing out that these people, if they actually believe their predictions, have a route to large wealth stretching before tham but rather unusually they are neglecting to take this route. Perhaps, by bizarre co-incidence, there is an exact correspondence between believing in future food shortages and being an altruist. But I don’t believe that -W]


  20. W

    How do you know that people are not taking the route to large wealth? They won’t get that wealth until the price of food goes up. There are a lot less of them than those who think food ids correctly priced.

    [Could be. But I doubt it -W]

    Moreover the claim is that society will break down as a result of food shortages. What chance then of getting the reward from past futures investments? Even if the market does not go bust, do you think that the government will allow a few people to grow rich out of a food crisis. The first thing they will do will be to close the futures market, just as they banned short selling when the banks were in trouble.

    [They banned short selling, but they didn’t invalidate any existing contracts -W]

    The problem is you are viewing the world as a linear system, but it is not. Name one natural thing that is a straight line or increases at a steady rate. This is all explained in a recent book called “The Black Swan”, but I don’t think you would enjoy it. He explains that life is not simple, and impossible things can happen such as the discovery of black swans.

    [No I’m not. And impossible things can’t happen (obviously). People predict disaster all the time; the author of Black Swan just happened to get his timing right -W]


  21. There is of course another “fly in the ointment” so to speak, Protectionism.

    With the ability of Southern hemisphere countries able to “outperform “ Eu and the US in agriculture production and they do due to import quotas ,tariff protection and “kickbacks” food production (and pricing ) is arbitrarily predetermined by Western Governments.

    We csn witness this with the DOHA round of the WTO and procrastination from the Eu ,Japan and the US.

    An interesting perspective here.

    Another here.

    “The power of the agro-corporate lobby is substantial and getting stronger. The UN Development Programme found that agricultural subsidies had risen 15% between the late 1980s and 2004, from $243 billion to $279 billion (a figure Vandana shiva considers a vast underestimate), with Japan (56%) relatively most subsidy-intensive in relation to the total value of agricultural production, compared to the
    EU (33%) and Us (18%) (United Nations Development Programme,

    Unlike earlier periods when farming was smaller-scale and at
    omized, advanced capitalist countries’ agricultural subsidies today overwhelmingly benefit large agro-corporate producers. subsidies in the EU’s fifteen major countries are even more unequally distributed than the Us, with beneficiaries in britain including Queen Elizbeth ii
    ($1.31 million), Prince Charles ($480,000) and britain’s richest man,the Duke of Westminster ($1.13 million)(sharma, 2005a).


  22. The problem with saying things like “Sorry, but whilst lack of food can obviously exacerbate problems, I don’t see evidence that even one state has been tipped into barbarism or whatever by lack of it”, is that famine doesn’t appear on its own. Famine was a major component in the disintegration of Somalia and Sudan, but you can argue that the famine, not to mention the social disintegration, there was exacerbated by politics — in practice, in the real world, it is impossible to separate famine away from things like politics, poverty, disease and climate. Want to blame civilisation collapsing somewhere on only part of this? You have a package deal; but that doesn’t mean that the part that famine plays is an insignificant one.

    Anyway, wrt the question of CAN famine bring down a civilisation — well, historically yes, as the warfare which eventually resulted in the disappearance of the Anasazi is linked to increasing scarcity of resources during a mega-drought, I believe, and there is a strong school of scholarship arguing that decline in food production led to the downfall of the Mayans and the collapse of their cities.

    [I have no problem with that – historically, there is reasonable evidence that this has happened. I should have been clearer: I meant, recently, say within the last 100 years. As a counter-example, the dust-bowl did nothing -W]

    Now if you are arguing that it isn’t likely that famine will bring about the collapse of modern global civilisation, THAT does not seem terribly likely. However, it can still contribute to a great deal of death and misery and political instability in developing nations, which (aside from simple human concerns) will have knock-on costs to the rest of the world in various ways.

    [Agreed. Though I would also that all current famine problems are essentially political and distributional: there has never been a time (in, say the last 50 years) when the world hasn’t had enough food to feed everyone -W]


  23. True, although we are (literally) eating away at our margin on that one. After a few years of floods and poor harvests in many parts of the world (and China’s increasing demand anyway) and the biofuels boondoggle, we don’t have anything like the grain stockpiles that we had in the 70s or 80s.

    [I’m not convinced by the 70’s / 80’s stuff as a sign of trouble now. Quite likely, we have smaller food piles because having giant foodpiles is pointless. Though I claim no expertise on this – I’m just guessing. According to JMC, the US used to have a helium stockpile. No because it needed one, but because commercial interests had persuaded the govt to acquire one -W]


  24. There is a story about these food shortages but Lester misses it, though other journalists did get it right. If you were trading commodities you’d have noticed how much the enormous volatility was caused by hedge funds colluding to move prices just by sheer buying power. This apparent wealth was of course 100% based on credit. Things got worse when the share prices dipped in early 2007 and pension funds started to go into commodities and oil too, both of which pushed up food prices according to simple supply and demand. They all thought they couldn’t lose money because they started believed their own lies. But of course they could lose money, as I predicted on Lubos’s blog, oil and commodities would obviously tumble when the expiry dates come due on the options. Unfortunately people were starving long before that.

    [Sorry, you get (as I said before) null points for just making the prediction, you need to have put money on it before I take you seriously. And no, I don’t believe the prices rocketed just because of speculation: demand was up, genuinely -W]

    The upshot is that the food shortage was artificial; it was all lying in warehouses waiting for the sellers to get the price they were looking for. It’s really a lesson in what happens with uncontrolled credit. Which few people seem to have learnt because personal prejudice gets in the way of the facts.

    [Evidence? -W]

    One might have though that it won’t happen again because the Wall street crashers had no money left. But lo and behold, our wise governments have been indoctrinated into thinking that wealth comes not from adding value to raw materials, but simply from moving money around. So they are spending our money on buying up all the toxic debt from these criminals so that they can go out and do exactly the same again.

    So could food shortages bring down civilization? You correctly answer yes: In an ordinary world they shouldn’t. But if another credit stampede is allowed there will certainly be another crisis.


  25. For Eli:
    “Africa’s deserts are in spectacular retreat”

    Possibly because…
    “..rising CO2 concentrations could change wind patterns and reduce sand erosion through ‘fertilisation’ of desert vegetation..”

    and also…
    “the last two decades of the twentieth century were a good time to be a plant on planet Earth”

    It fine to be stubborn when you are right all the time but when you are consistently wrong it’s quite another matter.


  26. When the helium stockpile was started, it made a lot of sense; getting it out of natural gas was expensive at the time, and there weren’t many sources which did liquefy it, so it was expensive and rare for industry and scientific research to get hold of. The US gov’t subsidising its recovery and stockpiling it for scientific use was, in the ’60s, a savvy business decision.

    When they were told there was plenty and recovery was a lot cheaper in the 80s, the pulled the plug on that programme and decided to sell off the stockpile to anyone who wanted some.

    The bad side is, that huge stockpile (which is still being sold down) is precisely the reason helium is cheap and easily available in such quantity today, and when that is gone (8-20 years?) it will suddenly get a lot more expensive again. ESPECIALLY since most of the helium being extracted from natural gas isn’t being saved right now!

    Of course, on the good side, the desperate need for helium-3 may well drive the development of the first permanent moon base.


  27. Nice post, William. I didn`t expect you to be sounding like libertarian Ron Bailey, but I largely agree with you both here.

    However, while not “civilization challenging”, we do face real problems of keeping up with growing populations and stresses from climate change, and while civilization isn`t threatened, nature certainly is – not least from overharvesting of commons and conversion of tropical forests to soybeans.

    Food protectionism and the food to biofuels ag lobbies also put stress on food supplies and prices.


  28. From JamesG’s third link:

    “Humans claim about half of all the net primary production on Earth,” says Myneni. “Productivity may have increased 6 percent in the last 18 years, but human population has increased by over 35 percent over that same time. One half of a 6 percent increase in the net productivity compared to a 35 percent increase in population means that these net primary productivity changes have not improved global habitability in any significant way.”

    And from Science Daily:

    Insects Take A Bigger Bite Out Of Plants In A Higher Carbon Dioxide World


  29. William — SciAm editors might have exadurated various numbers. This occurred in an earlier article in SciAm on Supervolcanoes, from e-mail commenication with the author.

    But on the main topic of this thread, I remaind everyone that industrial agricuture requires the use of NPKS fertilizers. Mineable P is currently be exploited at the rate of 0.8% per year; supposing that doubles soon due to expanded production of biofuels, the world runs out around 2070 CE. The so-called reserve base cannot be economically exploited unless energy is “too cheap to meter”.


  30. “Now, in the best of worlds USA would simply reduce its consumption of food, but will it? The wrong President might just as well start military interventions “in order to restore capitalism and free trade”. From there the situation might degenerate.”

    What would happen is prices would go up for a while, people would eat less ( and be in better shape), and US farmers could start bringing into production farms unaffected by the drought. Most of the North East – one the grainyard for the East – gentleman farming and could be used far more productively. Then prices fall.

    Lots of countries import food. It is not a crisis.


  31. This is a good example of shoddy thinking

    “I remaind everyone that industrial agricuture requires the use of NPKS fertilizers.”

    If that were true, and it is not ( plenty of agriculture depends on other forms of fertilizer including organic fertilizer) then the solution would be to use something else, or use more GM products as it runs out.

    “Mineable P is currently be exploited at the rate of 0.8% per year; supposing that doubles soon due to expanded production of biofuels”

    so we “suppose” that the rate “doubles soon” based on biofuels, but biofuels compete for acerage with non-fuel food – one replaces t’other. To double production would be to double output of all fuel.

    “the world runs out around 2070 CE”

    And it it quadruples we run out in 2035. but it won’t

    ” The so-called reserve base cannot be economically exploited unless energy is “too cheap to meter”

    So use something else – in 2140 as PKS runs out.


  32. Hey eoin,

    That’s given me a great idea. If PKS runs out and there is no food we could eat something else! Marie Antoinette had the right idea when she said “If the peasants have no bread let them eat cake?”

    Cheers, Alastair.


  33. Speculation in commodities IS demand. If you buy an option then you control it and it’s off the market so nobody gets it until you relinquish, sell or let it expire. That’s what happened regularly in the commodities markets for the last 5 years. As hedge funds started to concentrate on once-unfavourable commodities markets there was collusion and forced volatility en masse. Ask anyone trading those markets. Paulson’s Goldman Sachs even lowered the gasoline price for the US congressional elections by dint of massive dumping. It reached its out of control peak in 2007 due to hype about scarcities by merchant bankers who stood to gain from such hype.

    Evidence? Well it all dropped sharply again didn’t it? Pretty good evidence I’d say. People didn’t stop needing to eat after all. Anyway there was a Washington hearing about the oil price rises and George Soros told the truth to those who wanted to listen. The Africans of course had been reporting this warehouse hoarding for a long time but nobody listens to them apparently. BTW I don’t recall anyone anywhere predicting the fallback. Show me on eperson who did. I was pretty sure I was almost entirely alone in that prediction. A lot of people however were predicting doomsday and blaming overpopulation or biofuels. Absolutely every pundit was talking about $200 and $300 oil and saying it was the absolute end of cheap oil – even the Daily Reckoning newsletter which is usually spot-on with it’s predictions. So what did you predict? And no I didn’t put money on it – making money out of starvation is not my thing. It seems just fine with too many people though. BTW2. Options on futures contracts are not the same as futures contracts Eli.

    Chris S
    Regarding the end of that last link I posted. It was spot on. Yes food shortages will be a challenge: A challenge we’ve had for a long time now and so far always met. Water supply is of course the biggest challenge. The reason for the link was not to paint a rosy picture but to respond to Eli talking about how plants will find it difficult to respond to warmer, drier conditions. Deserts retreating shows that it’s really warmer and wetter and plants love it. Real data always tell us more than pessimistic anecdotes.


  34. Yeah, options provide additional leverage so usually there is a hell of a lot more out there in options than in contracts. Still the point is the same, nether the options nor the contracts go very long.


  35. Eli
    You have to sell options before expiry which is the important bit, and they lose value all the time down to expiry. At the end of a futures contract you at least have the commodity and have to pay, whether you wanted to or not. Options bought in Dec/Jan/Feb were sold when the bubble reached it’s peak. As the market was initially overbought on the hype it caused a price bubble and when the mass selling starts an oversold market it causes a glut, leading to a price crash. I’ve been through it many times. It’s not what the commodities market was meant for and I hope it’s now finished.

    And apologies to William, apparently Soros himself predicted it as a bubble. I didn’t see that before now.


  36. The biggest threat to global stability is the potential for food crises in poor countries to cause government collapse. Finally someone is listening to Lester Brown and his warnings of a collapse in our food supplies, as a new article reveals in Scientific American. Some days, it’s tough to not being pessimistic about the long-range future of civilization.


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