Here is some incentive to dig yourself out of debt.
I used today in a SS roundtable hosted by Carl Levin. I said, "well, we're busy debating crisis or not. If you really want to talk honestly to 18-40 year olds about SS, you need to talk about the real crisis--the end of the dollar as a reserve currency. When that happens, it won't matter whether we've privatized SS or not--we'll all be looking for recyclables off the top of garbage dumps, just like the Argentine middle class."
That's not an exaggeration. Bush's radical and irresponsible fiscal policy has the rest of the world engaged in some deviant dance of financial self preservation. Ian Welsh sums it up from the Canadian perspective. He shares some wise advise with us Americans too.
The Economy The primary issue in the Canadian economy right now has to be the American economyi. Even n a non-meltdown scenario we're looking at a loss of another 10 to 20% of the value of the US dollar. A meltdown could drop it 40%. This isn't far off - I'd guess, and many economists agree, that we're looking at 6 months to 2 years. So there's no real excuse to not start preparing for this now.
The thing is that if the US dollar really melts down, they're going to import less and our exports are going to be more expensive. Which means the Canadian dollar will probably rise, then fall, though still remain high against the US dollar. But because we're so dependent on them it's going to hurt us - a lot. Still, there are things that can be done. The Bank of Canada needs to be ready to move out of our US reserves. We need to be ready to refinance as much federal and provincial debt as possible during the brief window that we'll have when the Canadian dollar is high - and in response the Bank of Canada drops interest rates through the floor to try and stop it from getting any higher. That period will be ideal for refinancing and if the various provincial and federal governments haven't got their plans in order to refinance at that time they should get cracking. Now.
The wildcard here is energy. We sell a lot to the US. Most meltdown scenarios of the US dollar will also probably lead oil to being priced in Euro's, and even on that basis, spiking in price. So we - and especially Alberta - should make out very well. Oil demand is relatively inflexible, it'll drop from the US, but other trade partners (most notably China) will take up the slack. Alberta is, and should continue, making sure that it has other markets available.
What follows here is a grim look at where we are heading. We have some really big challenges ahead of us, an unsustainable monetary policy, dangerous extremes of economic inequality, sudden climate change, the impending threat of a flu pandemic and the rapid die off of the planets most vulnerable species. War is a sorry diversion of the innovative leadership we so desperately need right now, even more with the ever increasing possibility of nuclear war; that is something that the President is not afraid to start.
If you are a Bush supporter you would be wise to pay as much attention as anyone who is not. Maybe you did
choose this willingly; I can't read your minds; take heed and act accordingly.
Attaking Iran is going to lead to unrestricted conventional air war, minimum. Because those forces in Iraq, sitting on top of a simmering insurgency, are way too vulnerable if both Syria and Iran are forced into war with the US.
I assume it would play out with an air and naval attack on Iran, the when Iran reacts by sending troops into Iraq the US plays that domestically as "we just tried to get their nukes, which wasn't an act of war. But they've attacked us, which is. Everyone rally round the President while we call in the B52's."
The sad thing is, it'll probably work.
The next part is meaty, but you don't want to miss it...
Of course in actuality, the puzzle pieces like the shift of the center of gravity of the World's GDP to China and India have been falling into place for quite some time. The selloff is a classic market symptom of admitting the obvious, of a crisis of confidence in the old order that ushers in the vacuum of power from which the new order can arise. If this is the so-called "tipping point" or an event in a chain of events that becomes seen in hindsight as the tipping point we do not yet know.
However the instability of the system even as Bush makes his trip to Europe to attempt to shore up the system gives us hope. It is a dire hope. It is a hope through pain and sacrifice and struggle, but no matter how slim a hope it is there is hope. The reason why there is hope is that the plans of the schemers have not unfolded according to their time schedule.
It is too soon. The stone upon which they stumble is of course Iraq and more precisely the failure to seize the oil assets of Iraq and use them to create a new monetary order - one based on military control of oil production. This is why they are off balance. If they had succeeded in Iraq, right now the gushing oil money would be floating all the budget cuts in Federal spending that Bush wants to make. This is because the only time people will easily countenance to spending cuts is when the economy is good.
This is also why Bush is stumbling in his attempt to impose draconian and radical financial leverage on the Social Security System which is nothing less than a lien against the future of America's GDP growth. If he had succeeded in Iraq, then the gush of oil money would have created a false sense of prosperity under the Friedman-Mundell monetary regime. Bush could have then claimed this economic activity, really generated by vampirically draining Iraq's future wealth, was the vindication of his tax cutting policies and as the economic growth engine revved the higher tax receipts would have hidden his budget deficit sins. [emphasis mine]
However with Iraq sputtering, and the American economy spinning its wheels without traction despite having the gas pedal firmly down then now foreign investors are suddenly leary of lending Bush the money he would need to finance transforming the old economic and governmental order. This decline of interest in lending is not reflected in the Treasury yield curve but in the currency float of the dollar. Hence the importance of South Korea's shift and the market reaction.
However there is an old saying. Politics trumps economics and that war is the continuation of politics by other means. This reminds us of the Weberian postulate that the monopoly of organized and socially sanctioned force is what defines a government. In one sense, war is all about economics. In another sense, economics is what happens in between wars. In reality the two are not truly separate. A war is what happens when a government order tries to save itself or grow itself by cannibalizing another economic system. An economic system with growing commercial activity on the other hand can only be sustained by a social order imposed by an unchallenged military regime.
Last week a poster chimed in with a very interesting term War-Keynesiasm.
If the payers are not ready, if they need to buy more time, to attempt to transform the economic and governmental system - and make no mistake it is too late by far to attempt to restore the old order whatever the DLC dreams of - then they must manufacture an occasion to provide them more time. If the economy cannot sustain itself long enough for them to consolidate their hold on power, and the schemers do not wish to yield the field, then they must have war. They must hav e war to hold the system together long enough for them to make the change. If people are questioning their legislative leadership now, just wait until they roll into the 2006 Congressional elections on the back of a sick economy.
By the time we get to that point we will probably realise that we are completely bankrupt, exhausted and unemployed. We don't produce much of anything anymore, the Department of Defense doesn't even do business with the working people who pay for all those imported weapons. We don't produce anything and we have stripped the infrastructure to start it up again.
When we realize that we don't have freedom, opportunity, security or capital we might just as well give in and become The Chinese States of America. When that happens don't blame me-I chose the other way, and don't worry about George Bush-he's taken care of himself the way he always has.