Friday, April 08, 2005

The economic tsunami, just months away

Mike Whitney: 'The economic tsunami, just months away'
Contributed by megsdad on Friday, April 08 @ 10:15:37 EDT
By Mike Whitney

"If the world's central bankers accumulate fewer dollars, the result would be an unrelenting American need to borrow in the face of an ever weaker dollar - a recipe for higher interest rates and higher prices. The economic repercussions could unfold gradually, resulting in a long, slow decline in living standards. Or there could be a quick unraveling, with the hallmarks of an uncontrolled fiscal crisis."
-- New York Times editorial
I know, from reading the comments on this web site, that many Smirking Chimp readers believe as I do, that the economic tsunami planned by the Bush administration is probably only months away. Many of us have watched helplessly as the national debt has increased 3 trillion dollars while the dollar has continued its predictable decline. At present, the dollar has fallen a whopping 38% since Bush took office, due entirely to the massive $450 billion tax cuts Bush gave away to his constituents. At the same time, myriad laws have been passed (Patriot Act, Intelligence Reform Bill, Homeland Security Bill, National ID, Passport requirements etc) anticipating the need for greater repression when the economy takes its inevitable nosedive. Regrettably, that nosedive looks to be coming sooner rather than later.
The administration is currently putting as much pressure as possible on OPEC to ratchet up the flow of oil another 1 million barrels per day (well over capacity) to settle down nervous markets and buy time for the planned bombing of Iran in June.
Like Greenspan's artificially low interest rates, the manipulation of oil production is a way of concealing how dire the situation really is. Rising prices at the pump signal an upcoming recession, (depression?) so the administration is pulling out all the stops to meet the short term demand and maintain the illusion that things are still okay. (Bush would rather avoid massive popular unrest until his battle-plans for Iran are carried out) ...