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<DIV dir=ltr><FONT size=2 face=Arial>----- Forwarded Message -----<BR><B><SPAN style="FONT-WEIGHT: bold">From:</SPAN></B> John Fullerton <jfullerton@capitalinstitute.org><BR><B><SPAN style="FONT-WEIGHT: bold">To:</SPAN></B> Robert Searle <dharao4@yahoo.co.uk> <BR><B><SPAN style="FONT-WEIGHT: bold">Sent:</SPAN></B> Tuesday, 6 March 2012, 4:45<BR><B><SPAN style="FONT-WEIGHT: bold">Subject:</SPAN></B> Update: Commodities are Different<BR></FONT></DIV><WBR>
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<div><FONT color=#111111 size=5 face=calibri><B>Update: Commodities are Different (in a "Full World")<BR></B></FONT><FONT color=#333333 size=2 face=calibri>by John Fullerton</FONT></div>
<div><FONT color=#333333 size=2 face=calibri>The concern <A style="TEXT-DECORATION: none" href="http://www.capitalinstitute.org/sites/all/modules/civicrm/extern/url.php?u=816&qid=81493" rel=nofollow target=_blank></FONT><FONT color=#5987c6>I raised last June</A> that we should enforce the Bank Holding Company Act and not allow the too often irresponsible, gigantic, TBTF and taxpayer-subsidized banks to engage in proprietary physical commodities trading has now been raised in a <A style="TEXT-DECORATION: none" href="http://www.capitalinstitute.org/sites/all/modules/civicrm/extern/url.php?u=817&qid=81493" rel=nofollow target=_blank></FONT><FONT color=#5987c6>new article</A> by Reuters. Abuse by large-scale, trading-driven firms, more so in physical commodity markets than in financial markets, can lead to drastic harm in the real economy as we learned from Enron's manipulation of the California electricity markets. But, as I detailed in my
post, the issue is much bigger than banks driving price swings in commodities. A world with finite resources and <A style="TEXT-DECORATION: none" href="http://www.capitalinstitute.org/sites/all/modules/civicrm/extern/url.php?u=818&qid=81493" rel=nofollow target=_blank></FONT><FONT color=#5987c6>planetary boundaries</A> will have allocation problems that markets cannot handle effectively or fairly. Rising commodities prices, and the effects they have on the poor, are primarily due to the fundamentals of limits to growth we are beginning to bump up against. The confluence of allocation, pricing, equity, and limits questions when dealing with scarcity of critical resources where there are no easy substitutes is already posing real challenges, as we discussed in our “<A style="TEXT-DECORATION: none" href="http://www.capitalinstitute.org/sites/all/modules/civicrm/extern/url.php?u=819&qid=81493" rel=nofollow target=_blank></FONT><FONT color=#5987c6>Big
Choice</A>” essay.</FONT></div>
<div><FONT color=#333333 size=2 face=calibri>As a complement to the balanced Reuters article and rising gasoline prices (this time triggered by political tension in particular), I’ve updated my post on commodities from last summer which is even more important today.</FONT></div>
<div><FONT color=#333333 size=2 face=calibri>Read more at the <A style="TEXT-DECORATION: none" href="http://www.capitalinstitute.org/sites/all/modules/civicrm/extern/url.php?u=823&qid=81493" rel=nofollow target=_blank></FONT><FONT color=#5987c6>Future of Finance Blog</A>.</FONT></div></TD></TR>
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<div><FONT class=yiv1368276998Apple-style-span color=#111111 face=calibri><SPAN style="FONT-SIZE: x-large" class=yiv1368276998Apple-style-span><B>Oxfam's "A Safe and Just Space for Humanity"</B></SPAN></FONT></div>
<div><FONT color=#333333 size=2 face=calibri><BR>A new paper out by Oxfam’s Senior Researcher Kate Raworth has had our attention and that of much of our network this week. In the piece, Raworth details a “safe and just space” that accepts the planetary boundaries from Rockstrom’s cornerstone paper "A Safe Operating Space for Humanity," but extends the idea to include the 11 social thresholds beyond which our society is unjust.<BR><BR>The paper (<A style="TEXT-DECORATION: none" href="http://www.capitalinstitute.org/sites/all/modules/civicrm/extern/url.php?u=805&qid=81493" rel=nofollow target=_blank></FONT><FONT color=#5987c6>A Safe and Just Space for Humanity</A>) is only a first pass at a unified framework for setting social and ecological boundaries, but it is a much needed flag in the ground around which all groups working on the Capital Institute's goal of living equitably within our planetary means can position themselves. We are thankful
for this strong effort by Oxfam to keep developing the conversation.</FONT></div></TD>
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<div><FONT color=#eeeeee size=3 face=calibri><B>What We're Reading </B></FONT><BR><BR><FONT size=2 face=calibri><FONT color=#cccccc>Oxfam’s Senior Researcher Kate Raworth released a paper on February 13th that lays out a new visual framework for understanding where a just society fits within Rockstrom’s “safe operating space.”</FONT><BR></FONT></div>
<div><FONT color=#5987c6 size=2 face=calibri>"<A style="TEXT-DECORATION: none" href="http://www.capitalinstitute.org/sites/all/modules/civicrm/extern/url.php?u=805&qid=81493" rel=nofollow target=_blank></FONT><FONT color=#5987c6 size=2 face=calibri>A Safe and Just Space for Humanity</A>"</FONT></div>
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<div><FONT size=2 face=calibri><FONT size=2 face=calibri><FONT color=#5987c6 size=2 face=calibri><FONT size=2 face=calibri><FONT color=#5987c6 size=2 face=calibri><FONT size=2 face=calibri><FONT color=#eeeeee size=3 face=calibri><B>Comment of the Week</B></FONT></FONT></FONT></FONT></FONT></FONT></FONT></div>
<div><FONT size=2 face=calibri><FONT color=#cccccc>"The answer to our present unsustainability is an economic system based on cooperation instead of competition."</FONT></FONT></div>
<div><FONT size=2 face=calibri><FONT color=#5987c6 size=2 face=calibri><FONT color=#cccccc>-Walter Szykitka,</FONT> <A style="TEXT-DECORATION: none" href="http://www.capitalinstitute.org/sites/all/modules/civicrm/extern/url.php?u=809&qid=81493" rel=nofollow target=_blank></FONT><FONT color=#5987c6>Beyond Firm-Level Sustainable Capitalism</A></FONT></FONT></div>
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<div><FONT size=2 face=calibri><FONT size=2 face=calibri><FONT color=#5987c6 size=2 face=calibri><FONT size=2 face=calibri><FONT color=#5987c6 size=2 face=calibri><FONT size=2 face=calibri><FONT size=2 face=calibri><FONT size=2 face=calibri><FONT size=2 face=calibri><FONT color=#eeeeee size=3 face=calibri><B>Quote of the Week</B></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></div>
<div><FONT size=2 face=calibri><FONT size=2 face=calibri><FONT color=#5987c6 size=2 face=calibri><FONT size=2 face=calibri><FONT color=#5987c6 size=2 face=calibri><FONT size=2 face=calibri><FONT size=2 face=calibri><FONT color=#5987c6><SPAN style="FONT-FAMILY: calibri; COLOR: rgb(204,204,204); FONT-SIZE: small" class=yiv1368276998Apple-style-span>"The chief cause of problems is solutions."</SPAN></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></div>
<div><FONT size=2 face=calibri><FONT size=2 face=calibri><FONT color=#5987c6 size=2 face=calibri><FONT size=2 face=calibri><FONT color=#5987c6 size=2 face=calibri><FONT size=2 face=calibri><FONT size=2 face=calibri><FONT size=2 face=calibri><FONT size=2 face=calibri><FONT color=#5987c6><FONT color=#5987c6><FONT color=#cccccc size=2 face=calibri>-Eric Sevareid</FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></div><FONT size=2 face=calibri><FONT size=2 face=calibri><FONT color=#5987c6 size=2 face=calibri><FONT size=2 face=calibri><FONT color=#5987c6 size=2 face=calibri><FONT size=2 face=calibri><FONT size=2 face=calibri><FONT size=2 face=calibri><FONT size=2 face=calibri><FONT color=#5987c6><FONT color=#5987c6><FONT color=#cccccc size=2 face=calibri><A style="TEXT-DECORATION: none" href="http://www.capitalinstitute.org/sites/all/modules/civicrm/extern/url.php?u=810&qid=81493" rel=nofollow target=_blank></FONT></FONT></FONT></FONT><FONT
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