RUSSIANS ARE CUTTING BACK on personal spending and trading rubles for dollars as the collapse of world oil prices cripples an economy that just months ago soared on the strength of record prices for its petroleum exports. Even vodka sales are down.
Economists are especially worried by the mounting flight of capital and increased dollarization of the economysomething that last happened a decade ago when the government defaulted on its foreign debts.
"Some of my friends have converted all their savings into dollars, leaving just 500 rubles to pay the phone bill in their account," said an administrative assistant at a bank, who asked that only her first name, Olga, be used because she was not authorized to speak to the press.
"I've been telling my friends for months to buy dollars while they were cheap, but some of them just wouldn't listen," she said. A recent World Bank report documented the extent to which the decline of oil prices from a high near $150 a barrel to about $50 is wreaking havoc on the Russian government's budget and depleting its foreign-currency reserves.
This is a wicked turn of events just weeks after we have been on the edge of our minds fretting the absolute collapse of the dollar, and this after a snarky Vladimir Putin tried to threaten the West with strong words and stronger acts of aggression against its own former satellites. So it seems that national confidence always resides on a floating scale. At least the Russians still possess a fiscal reserve, despite the relative spoilage of their currency, which is something the United States can't boast as we continue to roll up debt.
Wonder what bad news Putin will have for Hugo Chavez in the near future, as the Russians rush to stop the bleeding while the Venezuelan regime suffers from the same impact of oil prices on its own ego-driven economy?
OKAY, I MISSED A COUPLE, but I did answer 31 of 33 questions correctly my first and only shot at the gold in this civics quiz sponsored by Our Fading Heritage. My score of 93% placed this 53-year old above the average American taking this test in November.
Wrong responses: #14 and #30. Damn, I knew what the Pilgrims were all about, and I knew they weren't Catholics. And with number thirty, I must have internalized wrong advice from Senator John McCain during the presidential debates. Oops.
What's really fascinating about this civic literacy quiz is the scorecard showing that US citizens tend to score higher than our own elected officials. Go ahead, pilgrim. Show your grit. Take the test. Embarrass your leadership if that's what it takes to get their attention. Okay, I know that's just fantasy...
But since Adrian Fenty's DC government is still stumbling around trying to sandbag the recent SCOTUS decision outlawing the District's draconian ban on handguns, rifles, and shotguns, in addition to all those other classes of weapons I know little about at this time, I think I'll present HERE the Commonwealth of Virginia's rather relaxed position on firearms among its own citizenry, and HERE is the website for the Open Carry advocacy organization. Strange stuff for a long-time DC city slicker like myself.
JUST IN CASE you haven't been paying close attention to the news of the day, Detroit City, long on the frail side, is failing and failing fast. The key questions are centered, or at least, should center on the reasons of why the American automobile industry, once the paragon of manly strength echoing the pervasiveness of ingenuity, hard work, and the American Way, is failing. Even if you are sympathetic to this latest charade of tycoon muskateers looking for a bailout for their own house of cards, and want to believe in your hearts of hearts that everything is on the up and upguess whatthese empty suits are just there to collect a king's ransom, and even admit before Congress they have no clue how to turns things around.
Detroit's woes are not new. The irascible Pat Buchanan, in his latest column, has sounded a litany of reasons why this once proud industrial model has slammed into these hardest of times, placing the blame on the government and the unions. Or as another irascible character named Pogo once remarked, "We have met the enemy, and the enemy is us."
Nothing really new here, but the article is worth a glance, just in case you haven't been paying attention. And here is a poignant if somewhat ideologically unsympathetic comment by one of Buchanan's readers:
Our problems are...
1. In winning WWII, we inadvertently (most of us, not FDR and his cronies) made the world safe for communism, so part of the resistance to commie expansion included opening our markets to foreign imports. We don't need an export-driven economy, but have to reestablish trade balance. 2. As Pat points out, we won WWII in large part because we could build the weapons and vehicles to destroy the enemy. Not only our external enemies and rivals, but also the leftists who are our internal enemies, have been working to destroy that advantage ever since. 3. Our tax system is utterly unprepared for the degree of foreign participation and ownership of our economy, and much of the income arising from what we consume is now no longer taxable by the U.S. 4. The U.S. dollar is currently the world's reserve currency, in part because probably no country makes it easier for foreigners to own real estate and businesses, and the tax system lets them do it on a largely tax-free basis. We need to domesticate our dollar and establish a barter at the border, goods for goods trade system, that no goods can come into the U.S. without being paid for right then and there at the border by goods going out of the U.S. That would enforce trade balance.
I keep reading about this border barter solution. What a logistical nightmare for the boys down on the docks. But then, that's what heads up business communication and moral leadership is supposed to be all about, not a culture weaned on astonishing golf courses where everybody knows your name and overwrought golden parachutes and getaway private jets around every turn for these self-serving song and dance resumè-builders and corporate thieves who do little but handsomely enrich themselves while grappling for the next rung on the ladder, while the very businesses they were hired to run falter, or fail.
But things are never that simple. American cars aren't the problem, the business model is. Robotics in Detroit has greatly reduced the toil of the average line worker who now makes over $70/hr including benefits. The car companies have gone as far as they can in reducing labor costs but have more people on retirement than in production. Toyota and all other foreign companies now producing in the US have 1/2 the labor costs and do not have to contend with the many years of retirement and health cost benefits.
I'd like to add that while it seems outrageous that the rank and file have nice comfy retirements as Detroit suffers, shall we not point out that so do the executives, who by the way, have lived a lifetime in excess privilege while it was they who mapped out the corporate plans with all their papers and pie charts, jetting around to meetings and rounds of golf, living high on the hog in mansions. The fact that the future in the car business did not turn out exactly as they planned was THEIR failure in doing their own cushy executive job. But now they want the workers on the line who popped and welded and bolted and polished and shipped the cars to market, doing their jobs on the clock, now, years later, to take the big hit. Somebody should throw those number crunchers to the Lions...
Gerald Celente of the Trends Research Institute reacts to the financial crisis on a Coast to Coast radio show. He speaks of tax revolts and even regionalization of America as an affect of Americans wanting no part of a federal government. Does this suggest a new secessionist movement? Here's a tip I ran across at the Confluence site:
When I was a DV advocate I received several threats from angy husbands. They decided we could take the class that police officers take without any extra cost. I learned to shoot a shotgun, a rifle, self-defense and use a 357 pistol. The shotgun is a bitch and almost took my arm off, until I was taught to lean forwad to the point of putting all my weight forward. I became a pretty good shot.
My grandparents always said that the necessities weren’t meat and veggies, we could grow those. The run was on things like flour, meal and sugar. My grammy always froze our flour and meal for a week, then put it in the cabinet. She learned a long time ago that it kills the eggs inside the flour and meal that I guess occur naturally. I do it now, just because I grew up with it, freezing it increases the shelf life by months.
Sage advice, my friends. And here's a link suggesting that the plastic liners inside tin cans can be dangerous, in fact more dangerous than the toxins inherent in plastic water bottles. According to the FDA, 17% of the American diet comes out of cans, and many of those have an epoxy liner made with Bisphenol A, a chemical which can mimic human estrogen and which is linked to breast cancer and early puberty in women. While the leaching of BPA from Nalgene water bottles and other polycarbonate bottles is a concern, the danger from canned food may be greater.
All this convenience we were sold by science seems to be nothing more than a delivery system for early death. Most of us will never lives as long as our grandparents, or our great-grandparents. This system is screaming out for a hard fix. And we may be getting it, one way or another.
THE ECONOMIC CRISIS HAS STAGGERED Wall Street and here is a man who says that the worst is still to come. He's been right too many times to dismiss. Try 2012 on for size. He also says President-elect Barack Obama doesn't have a prayer in fixing this mess.
Gerald Celente of the Trends Research Institute is a highly respected prognosticator. Here's another Celente forecast from the December 2007 newsletter called Top Trends 2008:
America’s going broke and the whole world knows it. Betting that its economy will spiral down and that the dollar will fall with it, foreign creditors are dumping dollars on the marketand even Third World street vendors don’t want to take greenbacks any longer. The further it falls, the less it’s worth. The less it’s worth, the less it buys. In the real world they call it "inflation." In America they call it "good for business."
Failing banks, busted brokerages, toppled corporate giants, bankrupt cities, states in default, foreign creditors cashing out of US securities … whatever the spark, the stage is set for panic in the streets. When the giant firms fall, they'll crush the man on the street...
It's all rather frightening. And yes, we believe this is a true outlook. There is nothing to stop this financial collapse. America is changing.
FORMER NEW YORK STATE GOVERNOR Eliot Spitzer has penned an article on the financial crisis.
First, we must confront head-on the pervasive misunderstanding of what constitutes a "free market." For long stretches of the past 30 years, too many Americans fell prey to the ideology that a free market requires nearly complete deregulation of banks and other financial institutions and a government with a hands-off approach to enforcement. "We can regulate ourselves," the mantra went.
Those of us who raised red flags about this were scoffed at for failing to understand or even believe in "the market." During my tenure as New York state attorney general, my colleagues and I sought to require investment banking analysts to provide their clients with unbiased recommendations, devoid of undisclosed and structural conflicts. But powerful voices with heavily vested interests accused us of meddling in the market.
When my office, along with the Department of Justice, warned that some of American International Group's reinsurance transactions were little more than efforts to create the false impression of extra capital on the company's balance sheet, we were jeered at for attacking one of the nation's great insurance companies, which surely knew how to balance risk and reward.
And when the attorneys general of all 50 states sought to investigate subprime lending, believing that some lending practices might be toxic, we were blocked by a coalition of the major banks and the Bush administration, which invoked a rarely used statute to preempt the states' ability to probe. The administration claimed that it had the situation under control and that our inquiry was unnecessary.
WE PRESUME THIS UNDULATING G20 meeting is stirring the pot to keep us all from the boiling point. The economic powers have gathered for Bretton Woods II. While my well-meaning but fiscally ignorant friends in the art world tell me I am grossly pessimistic in always seeing the glass as half empty, I simply shudder at the bubbling abyss into which I stare, and decide the toilet is not half clean it is dirty. Read onfor I and the keen observers who first clarified these facts for me can't reiterate enough:
The original Bretton Woods system was destroyed in '71 because of the need for credit.
Our manufacturing was offshored in the need for credit.
Our savings were dumped over the need for credit.
And now we're at the point where we can't even borrow for credit. There are repercussions for destroying the world's economy, and no one will be offered blame in this but the United States (although some say London is the culprit) as far as the history books are concerned.
At the root of this is a long, long trend of manipulation by the Fed to avoid biting the bullets of cyclical downturns in the economy thanks to the idea that made Americans should not suffer. It's been spurred by the creation of more and more paper that has no backing other than the credibility of our US treasury (thanks to Wilson, FDR, and Nixon). And now that credibility is all but gone poof as a result of these crippling bank bailouts to the very culprits who initiated this paper chase.
As a mere dot on the intellectual matrix, I can't really think of any point in history where a flee floating monetary fiat system didn't ultimately fail because as hearty spring follows harsh winter when the going gets tough, the bank starts printing more devalued paper. We're in that unsteerable skid now.
And since we are the world's largest debtor due to this endless expansion of credit, our leaders aren't going to have a lot of room to maneuver or offer discourse towards rejecting any agreements short of war. See Gabriel Thy's BITTERZONE TERMINAL Spring, 1991.
We are at the point in our history where sovereignty will be surrendered with a white flag in the name perpetuating credit. The implications are one of economic slavery for We the People who will be left holding the bag when this ponzi system comes collapsing down at the word of the American creditors. But savoring the fruits of historical possibility, let's swing over to the Great Commonwealth of Virginia for another take on matters...
I see a lot of folks on the boards concerned about globalization, the new world order, global money, unfair trade, et cetera. Don't worry, I say. The trash talk we are hearing and seeing right now is an economic collapse, an economic winter. This proves that we cannot even build a Tower of Babel in our own country, let alone the world. Look at the upsides of a monetary collapse:
the new world order is kaput.
as unemployment rises illegal aliens will be pressured into leaving
has anyone noticed that gasoline prices are way down?
the Kuwaiti investors lost their shirts in their market collapse (now ain't that a shame?)
my house has dropped in value. That's good you ask? Why yes, my property tax bill went down! If my house goes to $0 then I pay no tax! Plus my kids will be able to afford their own homes, rather than squatting on me. To me a home is not an ATM machineit's where I live. If I sell it what am I gonna do? Live on a park bench?
our government will go brokethat means no more deficit spendingstuff like the F22 Raptor will be canned. Heck, we need men with guns on our borders more than we need the F22. The aliens we want to stop are from Mexico...not outer space.
imposters such as Paulson and Bernanke will be shown to have "no clothes"
Obama will be revealed as a eunuch (as will all world "leaders")
China gets sent back to the middle ages
et cetera, et cetera...
A collapse means a return to traditional values, conservatism, less spending, less driving, more family, for some a renewed belief in God. It also proves that the development of a new world order is many, many generations away. Winter is cold, but it does kill rats and flies.
Let's face it. Humor and personal niche politics are always the best medicine when the pot starts boiling and the broth freezes over. What's the old ire? A conservative is someone who hates socialism when it benefits poor people but loves socialism when it benefits the wealthy.