Let's Form a Cartel on Agricultural Products

I am sick of OPEC artificially inflating the prices of petroleum products, with no repercussions for their actions. I would like to see the formation of a new cartel that specializes in agricultural products. If OPEC is going to artificially inflate petroleum products, I would like to see a retaliation by artificially inflating agricultural products. I cordially invite the United States, France, Holland, Germany, England, Canada, Australia, Italy, Belgium, and Spain to form a cartel on agricultural products. I do realize this is unlikely to happen in the near future, because it would be viewed by many as inhumane, however I do not believe it is such a distant possibility if oil prices reach $500 per barrel. The United States and Europe should seriously consider forming a cartel on agricultural products, not because it is the right thing to do, but because their national debts are at mammoth proportions and continue to grow every year. I believe this would be an excellent strategy to promote economic growth in Europe and the United States, and promoting economic growth is certainly much easier than raising taxes or cutting government spending.

Comments (4)

Jan 19, 2011 - 6:24pm
LIBOR, what's your opinion? Comment below:

Oil is priced in dollar terms worldwide. So even if the OPEC cartel (which doesn't control enough of the world's production anyway to be a real cartel http://www.nationmaster.com/graph/ene_oil_pro-energy-oil-production&date=2007 and whose member states cheat all the time) had any power over prices, their is another cartel in town, known as the Federal Reserve (made up of member banks) who has absolute control over the value of that dollar.

The Fed also raises prices on agricultural products worldwide in the same manner.

looking for that pick-me-up to power through an all-nighter?
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Best Response
Jan 20, 2011 - 12:44pm
mike55555, what's your opinion? Comment below:
<span class=keyword_link><a href=//www.wallstreetoasis.com/finance-dictionary/what-is-london-interbank-offer-rate-libor>LIBOR</a></span>:
Oil is priced in dollar terms worldwide. So even if the OPEC cartel (which doesn't control enough of the world's production anyway to be a real cartel http://www.nationmaster.com/graph/ene_oil_pro-energy-oil-production&date=2007 and whose member states cheat all the time) had any power over prices, their is another cartel in town, known as the Federal Reserve (made up of member banks) who has absolute control over the value of that dollar.

The Fed also raises prices on agricultural products worldwide in the same manner.

I guess I spent too much time being brain washed by the media and too little time concentrating on statistics to realize OPEC does not play a crucial role in oil prices, however I still believe OPEC plays a moderately significant role in the pricing of petroleum based commodities. On the other spectrum of your argument, I do not buy into the idea that the US dollar plays a major role in the pricing of agricultural products. I believe the price of agricultural products is based more off of supply and demand, and speculation by institutional investors than the value of the US dollar alone.

Even if OPEC doesn't have a stronghold on oil, I still believe the United States and Europe are desperate for ways to promote economic growth. Most of Europe has spent the last few centuries becoming accustomed to being a first rate power, and the United States has spent the last half century as the world's sole super power. I do not think these first rate powers are willing to accept the fact that it is entirely plausible that they will no longer be first rate powers at the end of this century if current trends continue, and they will eventually start making moves to promote economic growth out of desperation. I'm not forecasting the end of the world here, but if the the United States and Europe are lucky to break 3% annual GDP growth over the next few decades, and powerful nations in the developing world continue near the 10% mark for the next few decades, it doesn't take a genius to figure out the balance of power is shifting.

Men are so simple and so much inclined to obey immediate needs that a deceiver will never lack victims for his deceptions. -Niccolo Machiavelli
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Jan 19, 2011 - 11:00pm
rafiki, what's your opinion? Comment below:

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