Commodity prices began to run wild in the 2010s, a movement that ran counter to the "economic fundamentals" of real-world supply and demand.
People I met attributed the price fluctuations to a silent war waged by financial speculators.
Banks, hedge funds, and anyone with a robust portfolio could jump into this fray.
As in any war, the arms race intensified with each passing day, and new innovations and strategies and tactics emerged every year.
But all these inventions always produced the same result.
It's just a confusion of prices.

---From "Introduction: Monsters and Labyrinths, p. 16"

When I understood the Arab Spring in this way, my questions seemed to be answered.
This interpretation explains how a simple issue like food prices could spark chaos across an entire region, why revolutions erupted in a matter of months, and why so many countries were engulfed in civil war and so many people were forced to flee their homes.
There's a reason why immigration issues have dominated our feeds, with unprecedented numbers of immigrants, and why algorithmic media outlets have pandered to populism and fueled resentment against immigrants.
On the one hand, it was a frenetic, complex story, stretching from Tunis to Damascus, from Lesbos to Berlin, encompassing a dozen countries, thousands of militias, and tens of millions of immigrants.
But on the other hand, it was also a simple story of how a single number, the price of food, triggered a series of events.

---From "Chapter 1 Chaos: Why Society Boils at 210 Degrees, p. 48"

Meet and talk with Joseph Stiglitz at Columbia University.
“It was when the derivatives market was just starting to grow.
We learned that derivatives are potentially risky.”
The new derivatives were different from wheat or crude oil futures sold on exchanges.
The latter was regulated by the authorities, simple and standardized, and involved thousands of people in trading.
Both farmers and speculators understood the contract,
We knew what would happen if the farmer did not deliver the contracted amount of grain or if the delivered grain was of poor quality.
In contrast, the new derivatives market was unregulated, not publicly available, and not standardized.
The new financial products, called 'over-the-counter' derivatives, were traded privately between financial entities.
Moreover, the parties to the transaction created hundreds of pages of documents tailored to their needs, making it difficult even for experienced financial professionals to understand the contents.

---From "Chapter 2: Magic: Fairy Tales, Financial Alchemy, and Cargo Faith, p. 83"

We meet Jerry Parker at his office in Tampa, Florida.
He is the CEO of Chesapeake Asset Management, a trend-following CTA.
In the summer of 2008, Parker bet heavily that oil prices would continue their steep upward trend.
“I remember where I was, what I was doing, and what I was thinking.
The press reported that Paul Tudor Jones said, "Energy prices will crash and oil will not be able to hold $150."
My thoughts were like this.
'Hmm, don't worry about it.
Even if that guy is a famous trader and a billionaire with incredible brains, I won't give up trend-following.' And then, less than a day later, I regretted it."
Parker is convinced he is caught up in a speculative bubble.
“It was clearly speculators who caused the food and energy prices to rise.
This is an undeniable fact, as the prices of most raw materials plummeted shortly thereafter.”
---From "Chapter 2: Magic: Fairy Tales, Financial Alchemy, and Cargo Faith, p. 96"

As a result, huge amounts of wealth were quietly transferred as high oil prices continued.
It wasn't just the winners of the speculative games in the financial markets who made their fortunes.
Yani Bayam and his colleagues estimate that a decade of deregulation and financialization in commodity markets has resulted in unexpectedly large profits for oil-producing countries from rising commodity prices.
From 2002 to 2012, speculative finance generated excess profits of up to $820 billion for Saudi Arabia, $580 billion for Russia, $230 billion for Venezuela, $290 billion for Iran, and $190 billion for Kuwait.
The wealth was transferred directly to the most corrupt governments in the world.
And they were about to encourage the butterfly to flap its wings once more, creating a wave of chaos that would sweep the world.

---From "Chapter 4 Contagion: From Eurofighter Typhoon to One-on-One, p. 152"

But neither the EU nor Ukraine intended to remain dependent on Russia's pipeline forever.
In 2012, it was discovered that there were a staggering 2.3 trillion cubic meters of natural gas reserves in Ukraine's territorial waters in the Black Sea.
Russia tried to negotiate with Ukraine over mining rights for this deposit, but talks broke down.
In January 2013, Ukraine signed a contract with Royal Dutch Shell to extract natural gas in eastern Ukraine, where another large natural gas field had been discovered.
In April 2013, Ukraine's Minister of Energy and Coal Industry declared that the Black Sea region around eastern Ukraine and Crimea would produce so much natural gas that the country would no longer need to import it from Russia or any other country.
By 2020, Ukraine was expected to become a net energy exporter, supplying natural gas to Europe and competing with Russia.

---From "Chapter 5 Prosperity: Putin's Arrogance and the Invasion of Ukraine, p. 195"

“But when I investigated what really caused the 2008 food crisis, I realized that a crisis doesn’t have to be caused by an absolute shortage of something.
In 2007, the world food system produced more food than ever before.”
Some researchers, including Hendrix, have been looking at the climate-conflict issue from different angles and believe a different approach is needed.
“When we think about the threats to food systems and global agriculture, it’s easy to think of climate change, desertification, and worsening water shortages.
But the more important question is how food markets work, how they are designed to work, and what happens when they don't work properly.”
---From "Chapter 7: Proliferation: From 'Dangerous Games' to 'Mad Max', Kenya's Climate Chaos, p. 279"

Economists have long suspected a bubble in the coffee market.
In the coffee market, speculators have pushed up coffee prices regardless of underlying supply and demand.
But in 2018, hedge funds pushed coffee prices higher than necessary as rumors spread that there would be a global coffee glut.
If previous bubbles pushed up prices, this one pulled them down.
It was the same reverse bubble phenomenon we witnessed in 2014.
In 2014, rumors quickly spread that the shale oil boom, increased Saudi production, and decreased Chinese demand would lead to a glut in the crude oil market.
All these stories are rooted in reality, but the market mechanism does not end with gentle adjustments in price fluctuations, but amplifies them into sharp and destructive shocks.

---From "Chapter 9 Auction: Coffee, Coyotes, and Caged Children, p. 325"

Oil is the material foundation of the Putin regime.
Oil prices remained in the double digits for eight years, even falling into negative territory during the pandemic, but have steadily risen in 2021.
As oil prices rose, as Cullen Hendrix predicted, Russia's large tactical group appeared on the Ukrainian border.
And when it became known that Russian troops were stationed along the border, speculators pushed up oil prices to reflect a "geopolitical risk premium," and trend-following algorithms further fueled the upward price movement.
The prices were working exactly as described in this book.
Prices were a device that created chaos, a feedback loop that amplified the chaos of reality and the chaos of the market.
The market fueled Putin's arrogance, and as oil prices rose by the day, Putin was rewarded with huge profits.
Just as it invaded Afghanistan in 1979, Georgia in 2008, and Ukraine in 2014, Russian militarism flared up again as oil prices peaked.

---From "Exiting Words: The Giants and the Powerless, pp. 399-400"