Readers’ Responses to Our Question (17)

AMviennaVA:

Once the USD ceases to be reserve currency, the USA economy will take an awful dive: for you will not be exporting things the world wants, and without export you can not import. The creditors will flee, and the USA will be on the receiveing and of the ASIAN FISCAL MELT DOWN:

1., your nation's assets will be sold off for 10 cents on the dollar [thin includes any qworth manufacturer, bank, real estate, etc - as it happened in South Korea among others.

2., your life style will take a dive, for you will not enjoy access to 14 000 0000 barrels of oil from other countries, so end of exurb, suburb, airplanes, etc. Try commuting without oil.

3., you will plea for SOVEREIGN WEALTH FUNDS [Russia, OPEC, China, Japan] to try to save your economy.

4., Else you start another war, which probably will be the end of USA.

It is sad that your cohort in USA was so unrealistic in your last two presidential elections [and that the Supreme Court sold its independence and the Constitution down the Drain].

Hope that the shock will not be too great for the younger generations, for the older onse do not deserve the lifestyle they are pursuing, for they have spent the future income [or at least large part of it] oif thiier own children and grandchildren.

The essence of GREKK TRAGEDY, the fall of the mighty as reward for transgression against humanity.

Zoltan - To be quite honest, most people are hoping for the best, but there is a lot of depression. In Oregon, 22.5% of the home loans are subprime loans. Homes are lossing value like mad and, even as the value goes down, the hacks down at city hall and the county are appraising them higher so as to raise more tax revenue. So most people are disguested, too.

One really delightful thing I am seeing - people loathe India and Indians. As we are flooded with more and more of these parasites, taking jobs from citizens, the anger is is rising pretty much unchecked. Coming from a left leaning liberal, this might sound just awful, but I believe that India is and always has been a rouge culture of con artists. We have friends from Pakistan and, so, our take on Indian might be distorted by that, but I have read a lot of history. India did a land grab during partition and rendered millions of Muslims, who desparately wanted to become part of Pakistan, a permanant underclass, mistreated, raped, murdered, and taken for granted by India and Indians. The stroies they told us, about going to India to visit relatives and encountering Hindhu mobs throwing rocks at trains, murdering people in cold blood while the police stood by watching, is enough to turn your stomach. One thing they did point out that almost no one considers, is that Al Qaida, virtually all of the Muslim "terrorist" groups in existance got their start in reaction to India, Indian policy, and Indian racism. So, in the most literal sense imaginable, India is responsible for 9-11, the London bombings, the riots of France, and a whole host of other problems. Eliminate India, or render it powerless, and the world would be a safer place.

Vic van Meter :

your observqation on Iran and nuclear power there and elsewhere to replace coal/oil/gas is correct.

YEs even some large mining equipment 10-20-30 yard shovels can operate on electricity [they do now], thus your approach to electrify transport/construction/etc is coprrect.

If, however, you are looking for example of widepread nuclear generation caqpacity, you can stop in your journey in Europe, without ahving to go to Iran, and visit France where 75%+ of electrricity is made in uclear installations.

The barbarity of Bush Omert/Israel in trying to [or did] destroy nuclear [power plants, is a n examplary action of dreamers who do not think of CO2 production and or oil/gas depletion. For political grandstandoing these idiots would endanger mankind, for we have to save oil/gas for as much as possible to use in industry, agriculture and other needed fields of human requisites.

Before we beat the drums of panic, remember:

Oil price is reaching (accounting for inflation) the levels of the 80's. So much thought '$100 a barrel' may be, it is no worse than 20 years ago.

The US dollar will NOT continue to be the basis of valuation. That is bad for the US, but not necessarily the world. The transition will cause a recession, but afterwards we'll continue on our merry way.

So, nothing is wrong really. We are simply living in interesting times, or watching history in the making. (both are always painful to the individual by the way, but unavoidable).

MikeB: "I expect that we will completely and totally collapse. [...] Government, such as it is, will more closely resemble the feudal society of Europe's Middle Ages than what we know today. At the top will be an increasingly wealthy and isolated class of the governing. At the bottom will be an enormous number of desperately poor serf's. The middle class will all but disappear."

Mike, I don't think that's the only possibility; another future - I wouldn't know if it's better or not - is that the USA will stop existing as *United* and a new secession war will split it. I predict 3 states:
- west coast
- north-east
- redneckistan

And it will happen when the U$ dollar looses completely it's value, and those states (west and north-east) that have some sort of foreign exchange will start printing their own money. You live on the west coast if I'm not mistaken ? What's the mood over there ?

OK, it's no secret I don't have a very high opinion of GW. However, if anyone is wondering about the question posed here on PG they need to go no further then read Bush's latest comments about what a stalwart of democratic principles Musharraf is. It makes my skin crawl to think any sitting US president is so out of touch with reality. With a nitwit like this running the show it's a miracle we're not in a full blown depression.

BobL

Sorry I missed your post to me in the last question. Sometime in the future when we are discussing Israel, I'll address it. At any rate, thanks for the post.

Let America Be America Again

by Langston Hughes

Let America be America again.
Let it be the dream it used to be.
Let it be the pioneer on the plain
Seeking a home where he himself is free.

(America never was America to me.)

Let America be the dream the dreamers dreamed--
Let it be that great strong land of love
Where never kings connive nor tyrants scheme
That any man be crushed by one above.

(It never was America to me.)

O, let my land be a land where Liberty
Is crowned with no false patriotic wreath,
But opportunity is real, and life is free,
Equality is in the air we breathe.

(There's never been equality for me,
Nor freedom in this "homeland of the free.")

Say, who are you that mumbles in the dark?
And who are you that draws your veil across the stars?

I am the poor white, fooled and pushed apart,
I am the Negro bearing slavery's scars.
I am the red man driven from the land,
I am the immigrant clutching the hope I seek--
And finding only the same old stupid plan
Of dog eat dog, of mighty crush the weak.

I am the young man, full of strength and hope,
Tangled in that ancient endless chain
Of profit, power, gain, of grab the land!
Of grab the gold! Of grab the ways of satisfying need!
Of work the men! Of take the pay!
Of owning everything for one's own greed!

I am the farmer, bondsman to the soil.
I am the worker sold to the machine.
I am the Negro, servant to you all.
I am the people, humble, hungry, mean--
Hungry yet today despite the dream.
Beaten yet today--O, Pioneers!
I am the man who never got ahead,
The poorest worker bartered through the years.

Yet I'm the one who dreamt our basic dream
In the Old World while still a serf of kings,
Who dreamt a dream so strong, so brave, so true,
That even yet its mighty daring sings
In every brick and stone, in every furrow turned
That's made America the land it has become.
O, I'm the man who sailed those early seas
In search of what I meant to be my home--
For I'm the one who left dark Ireland's shore,
And Poland's plain, and England's grassy lea,
And torn from Black Africa's strand I came
To build a "homeland of the free."

The free?

Who said the free? Not me?
Surely not me? The millions on relief today?
The millions shot down when we strike?
The millions who have nothing for our pay?
For all the dreams we've dreamed
And all the songs we've sung
And all the hopes we've held
And all the flags we've hung,
The millions who have nothing for our pay--
Except the dream that's almost dead today.

O, let America be America again--
The land that never has been yet--
And yet must be--the land where every man is free.
The land that's mine--the poor man's, Indian's, Negro's, ME--
Who made America,
Whose sweat and blood, whose faith and pain,
Whose hand at the foundry, whose plow in the rain,
Must bring back our mighty dream again.

Sure, call me any ugly name you choose--
The steel of freedom does not stain.
From those who live like leeches on the people's lives,
We must take back our land again,
America!

O, yes,
I say it plain,
America never was America to me,
And yet I swear this oath--
America will be!

Out of the rack and ruin of our gangster death,
The rape and rot of graft, and stealth, and lies,
We, the people, must redeem
The land, the mines, the plants, the rivers.
The mountains and the endless plain--
All, all the stretch of these great green states--
And make America again!

There is a very, VERY big obstacle to the U.S. economy and the world at large. Oil can't keep running forever. We need to curb consumption, especially in the United States. And it's not often I get to take pot-shots at the liberal organizations that tend to vote for the same people I do, but this is where I start saying the green people went too far.

It's obvious we need another form of energy. No fossil fuel is going to cut it. We need to generate electricity in vast quantities, and not the kind that wind, water, and thermal power will generate. No, there's only one currently standing viable resource I can think of. And it's not ethanol.

America will have to switch, almost completely, to nuclear power or we will not be able to continue to fuel our growth.

This is where I think America needs to work with Iran. Iran doesn't know it, but it's sowing the seeds of its own destruction, and Bush would be very intelligent to help him do it. If Ahmedinejad wants nuclear power for his country, let him have it. Tell him that as long as his power program is transparent, nobody will interfere with it. Let him run it to his heart's content. Let him prove to organizations here in the United States that nuclear power can work safely and effectively.

This will shut up the activists in the United States keeping us stuck on coal and oil plants for electricity. And if we can get this fusion power reactor going that the world at large is working on right now, we're going to see a massive explosion in electric generation.

Think about it. Your car can run on electricity free of emitions. Your machines can all be made to run on electricity. Even things as large as construction equipment can run on electricity if you have enough power. And if we can do this with something that doesn't spew carbon monoxide, we'd be perfect.

So let Iran prove it. Let them power their whole country with nuclear energy so that America can prove to its own concerned citizens that it can be done. Because once you have enough electricity, you don't need to have a massive oil flow to keep your country running.

And if we aren't putting up all that money on oil, I guarantee the world economy will change mighty quick.

The price of oil is around $100 because of a simple reason.

THE DOLLAR IS NO LONGER WHAT IT USED TO BE.

Any society that spends over a trillion dollars just to maintain some 14 odd military basis under the pretense of protecting its oil life line can only go one way and thats into bankruptcy.

Any society that subjects the decision of the value of its currency to an independent entity whose primary interest is being subservient to paper traders ends up being principally motivated by manipulating and printing paper money without any relevancy to real economic dictums.

Bluntly put the devaluation of the purchasing power of the dollar is an existential result of what a cabal of neocons committed the US Government to do. Ignorance compounded with arrogance and greed always make the piper pay.

Unfortunately in this instance "the piper" are 300 million Americans who will pay and pay and pay until shades of the times Germans using wheel barrows had to pay for bread reaches a climax.

By that time those responsible will in all probability have moved on to greener and still unspoiled pastures. One fact is certain that whomsoever believes that a new captain [with experience] can right this ship is worse than a fool. Given that DC and Wall Street are saturated with "individuals with extensive experience"

Different but studied and prgamatic concepts and practices devoid as much as possible from ignorance, arrogance and greed need to be implemented.

Cause the same old same old with new faces can only hasten the inevitable.

The oil price is really no surprise. With Cheney in charge of the "energy policy", the US model has remained one of maximizing profits at every one's expense, without regard to the greater good or truly long term thinking.
As long as Bush rejected any thought about governing for the greater good and concentrated on enriching the top 2% and the corporate donors, all thoughts of energy conservation had been dormant.
The auto companies are fighting Congress right now about seriously raising CAFE. They have fought all attempts to implement change for as long as I can remember> From being instrumental in wrecking the Los Angeles Red Car system in the 1940s, to urging Eisenhower to start the Interstate highways system, to killing the GM Electric Car program, the auto companies have consistently looked out only for them selves and the oil companies.
Remember "Engine"Charlie Wilson, who was Secretary of Defense and said: "what is good for GM is good for the country".

The history of the auto and oil companies is pretty unequivocal: look out for our bottom line; what is good for us is good for the US.
The auto/oil industry has made its share of mistakes that came home to roost: the 1970s move to smaller cars and better mileage, which resulted in the ascent in their competitors from Japan. Yet even now they claim that the public wants bigger cars (Hummers), helped along by their advertising and total lack of leadership from DC, where the problems should have been foreseen decades ago (1975).

Corporate pressure on Congress and the leadership has resulted in leaving the US dependent on countries with governments that we fundamentally do not approve of, that control the majority of the world's petroleum. They have a cartel that controls prices, something that is illegal in the US (but done anyway).

What will be the straw that breaks the camels back with respect of what the people of the US will stand for before rising up in one way or another?
That time is being delayed by effective advertising and propaganda which is accepted by too many unthinking and uneducated people who also vote. As long as undocumented immigrants swell the increase in population the ranks of the compliant population will swell for years to come.

But there will be a day of reckoning for the excesses which are being practiced in the US:
low to negative savings rate, endless government borrowing increasing the national debt to 70% of GDP (that is third world level), endless encouragement of consumption (70% of GDP)coupled with consumer debt levels that rival the government's.

What is the outcome? A recession is not unlikely and perhaps desirable to bring people and government to its senses. Absent real leadership and statesmanship from the next President, the US
is heading down hill in its inherent strength, its military power, its economic heft and influence.
WE have lost our moral and real leadership of the free world, condoning dictators for expediency sakes, because we have to.

The end of US greatness and leadership is not quite near, but the day is rapidly approaching if we keep to the current path. And that path is greatly influenced by oil and its price.

"What's Ailing the World Economy?

The price of oil is near $100 a barrel. Global credit markets are in disarray. The world seems to be slipping toward recession. What's going wrong here? "
-------------------------------------

I rather with Jack Fairweather . I think in times of crisis we can spot the opportunities that before would appear unlikely for political or economic reason. Here we are at a crossroad, not for the first time, but just again. The difference is that we are at the dawn of the 21st century. Some might say: here she comes again with the same mantra. Anticipating anyone, yes, here I am to reinforce that point.

Crises offer more opportunities and this one is just a case in point. Instead of asking what is wrong here you can start focusing on opportunities such as new developments. Changes will be required? Certainly, I believe. The human mind is risk averse and that makes the process a little more difficult, but still possible.

To remain calm is fundamental. Do not start the blame game. You only lose time and the now precious renewable resources, among them our ability to adapt, to spot opportunities. If there aren't any, create them, develop them.

Just keep in mind that something big is moving..again..and not by the last time...Hardly the thing that is moving is also changing...and the notion of change means a new pattern. Don't focus your energy on what is wrong, but on what you can do. I do know that is hard as myself, well, I am quite used to fight adversities. In the end, we grow, we learn. I am tackling the question not only for my passion: new sources of energy, and a change in life-style, but I am tackling this question you pose on having your focus on new opportunities. Recessions are not new to the world...if this is a looming, certainly is not the last one.

Prepare yourselves to change...without internal rebellion or sentiments of being left down for whatever reason. This way leads nowhere and we need a new path. Time to think, to be creative, not depressive. This is not the same to say we should remain upbeat. No! It means thinking, hard thinking. As less energy and time you spend in searching for what is wrong, more you improve your chances to find a way out. That is my opinion.

There are following reasons for rising price of oil in the world market
1 American policy of aggression which created the feeling of insecurity among the oil producing countries.
2 Iran nuclear adventure and western threat of use of force.the UNO sanction against iran.
3 Suadian goverment decision to consider the dollar substitut e for oil currency.
4 The fall of dollar in international markets
5.The failure of American military adventure in Iraq and afghanistan with trillion debt budget.
6.opec decision to remain the same level of production.
7 Rising sensex around the world.The work of bull and bear to turn the world economy into casino house.
8.The rising demand of oil from fast developin nations around the world.
9 end of the western monopoly on buying of oil around the world.The turning of oil market into perfect market system.
All these leading the price to go high and high.

The back bone of Pakistan economy is textile. If textile is booming the Pakistan economy is booming and vise versa.

Few years before when the energy crisis started the textile mills opted for self generation, installing power plants powered by Cat, MAN Wartsila or other engines. all burning furnace oil or gas as fuel. The use of cheap and reliable energy boosted testile industry and made it competative with India and China.

Now situation changed at once. With fuel 100 $ Barrell the cost of furnace is coming to 10 cents/ KWHR. Resulting all power plants on furnace shut down. The gas prices still remained
stable but no prediction can be made for the future.

What to do and where we are heading

A recession on the door step can be averted . Exploring renewable energy will reduce the dependance on fossile fuels as well as curtail the demand and hence reduce the prices.

More important is the change of life style. When the oil was sold at 20 $ the people start enjoying biggerr and more luxury cars. They stop using public transport and one man one car culture flourished . We have to stop this phenomenon.

There is still a huge buffer in energy conservation. I was in UK when the famous oil embargo of 70s was going on.

The measure taken by Britishers is known to every body. I do not say that we should panic to that standard but at least think of energy conservation.

What the war in middle east has to do with it, is it relevent

Yes because a war consumes energy. If we settle the issues and try to negotiate on table and keep our planes on the hanger and destroyers anchored in port, we stop cosuming a big amount of energy. as soon as our demand drops the prices will fall down providing relief to common man all over the world.

My blog www.energy.com.pk exclusively deals energy issues in Pakistan

Alng with predicting the economic mess that is occurring, I would like to take credit for the related posts I have made about India. Now, India and Indian technocians, engineers,and scientists have been making off with our technology as result of U.S. corporations using them as a source of cheap labor to displace American workers. The have been selling that technology all over the world. It is no secret that much of Iran's nuclear program comes from India. But, how many people know that India has been fostering nuclear programs in other countries like Brazil, Argentina, and Jordan. Brazil announced today plans to build a fleet of nuclear powered submarines. Jordan admitted to having a nuclear program "for power generation" that is even more advanced than the one in Iran. There are reliable reports of similar programs in Egypt, Saudi Arabia, even a budding one in the UAR! All of them with Indian roots and Indian provided technology. What does this have to do with the falling dollar? It is a direct result of that sick joke called the "global economy", in out of control corporations and in that unholy alliance of them and governments scouring the world for money, emerging markets, energy, technology, and information. On another forum, discussing this same topic, the fear is of war resulting from the economic chaos we are just starting to see. I think a bigger fear ought to be the fall of American influence for moderation and morality. Bush's insane war and torture of prisoners in Iraq, Afghanistan, Cuba, and secret prisons are Europe and the Middle East destroyed our moral aythority. The collapse of our economy are destrpoying any possibility of regaining that authority and of having any future influence. So, war there might be, but it wont make much difference to an impotent U.S.

What's going wrong is the new American business model is spreading like cancer around the world. They are called "multinationals" but make no mistake about it, they are as American as Benedict Arnold and Boss Tweed. They have gutted this country, exporting technology and jobs, wrecked the middle class, exported our manufacturing infrastructure to the extend that most experts do not think we have the means to dig ourselves out of the looming depression. Instead, we have been sold a bill of goods, the illusion of a service based economy, as if we can actually survive by selling each other fast food and cheap imported clothing. What a sick joke.

OPEC (and Saudia Arabia caved on this, this morning) is moving to dump the dollar as the peg for oil prices. Amercian investors and businessmen have been buying up residences in Dubai, Ireland, and a few Eurpean safe havens - a place for the rats, deserting the sinking ship, to escape.

I am sitting here, writing this, trying to figure out if anyone is so foolish as to believe that "globalization" is anything other than a con job by investors, corporate executives, and the filthy rich, to gain even more money at the expense of working men and women, and even this country. The appropriate term for these swine is "free traitors".

Since the topic of this forum expects us to predeict what is going on, allow me to tell you. Foreign investment, all that money used to purchase U.S. government and private bonds is fleeing. Interest rates are better anywhere else in the world, the currancy is far more stable, and those countries actually have a future, especially the E.U. As our currancy collapses, CHina is going to be forced to dump their 1.4 trillion dollars in U.S. reserves. And why not? During the initial phases of our collapse (right now, especially during this CHristmas shopping season) we simply cannot afford to buy Chinese made goods at a rate that makes viable for them. Dumping that currancy, will merely exasorbate a percipitous fall of the dollar. Coupled with this will be a vicious inflationary spiral, as the declining dollar value and our lack of manufacturing capability, necessitating the import of even the most basic commodities (clothing, every sort of manufactured goods, even fertilizers and equipment for food production), cause Amercian's to spend an ever great portion of their declining incomes just to provide "the basics". As consumer spending on any sort of luxery items decreases, even things like Starbuck latte's, decreases, unemployment is going to sky rocket. European, and Asian, countries, already having protectionist laws in place, will react to the Amercian debacle by using tax and import laws to further protect their economies. This will result in the exit of much of the remainder of our manufacturing base. Look for Boeing, as just one example, to move most of it's production to China and India. Ditto for Microsoft, Apple, Intel, HP, and most of our high tech companies, although IBM is more likely to go to Germany.

Now, Eruope has been working for quite some time to immunize themselves from the economic collapse of this country. I have written about this time and again on this very forum, but they have, and quite sucessfully, too. With Europes further pull back, I expect that we will completely and totally collapse. Our society wull be profoundedly changed as a result of this. Government, such as it is, will more closely resemble the feudal society of Europes Middle Ages than what we know today. At the top will be an increasingly wealthy and isolated class of the governing. At the bottom will be an enormous number of desparately poor serf's. The middle class will all but disappear. It will be replaced by a very few lackey's of the ruling class and government employees, the later being finally transformed into a guild, with jobs staying within families.

Many think that Amercian's will not go quietly into that dark night of poverty and depair. I think they are wrong. I think the capaigns of fear and smear, the isolation of our citizenry into single issue voting blocks, the greed and lack of morality (exhibit "A" - flip on a television and see what Amercian's watch) and mob mentality and the unbelievable ability to delude themselves, of American's will result in people's quietly and meakly accepting their reduction to third world status.

What you are witnessing, dear reader, is the end of the United States of America and the end of the Amercian dream. And, it's all going to happen during our lifetimes, it's happening right now.

PG,

As to the second part of the question concerning recession the answer is probably. All indicators are leaning in that direction. However, we've lived through many a recession before and we will live through this one as well.

What has led to this? Ah, the answer to that question depends on whether you vote red or blue. The democrats say Bush, Bush and more Bush have led to this. The republicans think the democrats are the cause of this financial turmoil. I'm not really sure the republicans logic holds up too well, but whenever anything goes wrong in the world you can rest assured it's the democrat's fault.

A more realistic way of looking at this might be the turmoil in the ME (draw your own conclusions as to why this turmoil exists) combined with the weakening of the dollar (US housing market debacle) and the US's borrowing the money to fight the war in the ME has had a adverse impact on the world markets and especially the value of US currency in international markets.

The solution to this problem is easy to postulate. Stabilize the ME (Like there's a chance of that every happening), stop borrowing money, move to a balanced trade scenario, develop alternative energy sources and last, but not least, the ever unpopular raise taxes in the US to pay down our debt. However, since none of these fixes are either possible or popular we'll probably look for another way to put a bandaid on a deep gash that deserves stitches.

A side issue that would have popular support would be to limit the profits oil companies can take in this time of financial instability. How effective it would be is probably marginal since they have better and brighter CPA's and MBA's then our government has, but at least the general public would feel the government is trying to keep the average person from being gouged by big oil. It might be able to cut a few cents off the price we pay at the pump.

It should be noted that I am not a doom and gloom type of a person. I don't believe that what appears like a pending recession will have devastating consequences. It certainly will have consequences as all recessions have, but I have faith we'll go through it and hopefully come out of the other side a little better. We've known for well over 20 years we've needed to develop alternative energy sources and reduce our dependence on foreign oil and have just about ignored it. Hopefully, when gas hits between 4 to 5 dollars a gallon in the US this message finally sinks in. Hopefully, we've learned if you want to fight a war borrowing the money from around the world isn't a good idea. Ah, if I wasn't such a skeptic I would believe these lessons would be learned, but since I am, I doubt it.