We got a problem...
I’m getting increasingly nervous about the world my kids and grandchildren are going to be living in. In my darkest moments, the question about survival enters my mind. This has not been a good three months for the United States of America. Our weakness has been exposed and the realization of something being terribly wrong is entering everyone’s consciousness. This summer the rise in oil prices was dramatic. I’m glad I saw that one coming but what interests me is way these events are being used to support a more overt move to authoritanism.
During the beginning of the French Revolution, there was a complete lack of recognition by the elites that the taxes and social policy of the government had gotten out of hand. Moreover, the inability of the leadership to deal with several poor grain harvests and the environment was ripe for social upheaval and chaos. Economic and political trends are accelerated by exogenous events and not driven by them. The 2001 fall in financial markets was not driven by 9-11—the bubble had already burst by then, the trend down just accelerated. This summer gas and oil prices were already going higher, the hurricanes just sped up the price rise. China and India demand rise combined with production decline and coupled with lack of refinery capacity sent gas over $3.50 a gallon. It will not be a couple of years if ever that gas falls below $2.00 a gallon. The era of stagnation is upon us for a while.
A budget deficit that was huge before this new ½ trillion bailout will now be enormous. Who in their right mind would ever want to by US T-bills in this situation? Was there ever a time when a economic collapse was more likely to occur? I think not. I ran into an old friend of mine who owns a car dealership. He told me that no one is buying and that people are hunkered down and scared. Auto sales are down. Can you blame the people for not wanting to buy a SUV or truck given $3.00 gas? Just wait until winter; unless consumption falls dramatically we are going see shortages in gas and possibly heating oil. The prices of both are going sky high. What will be the people’s attitude when it hit $5.00 a gallon? Lots of debt and falling demand to not bode well for a market where the P/E is in the 50's
As if that were not enough to worry about, we now have H5N1... Not much needs to be said about that….just the building feeling of paranoia and fear. When does the next terror attack happen? Will there be enough fuel to heat the house over the winter? What happens it I get sick? Will my kids be safe in the city? Will my job exist this spring.
Fear is the watchword in the United States of America and I cannot trust that the leadership in this country is doing what is best for the greatest number rather then the privileged few. Yesterday, the President bridged the idea of using military troops to quarantine cities in the event of a pandemic. That means martial law. Sorry, I just do not trust a president with a below 40% approval rating and a penchant for lying, about Miers being the “the best person I could find for the Supreme Court” or “Iraq has weapons of mass destruction,” not to take advantage of the situation and further gut our civil liberties. Such an unpopular leader whose political party controls all the branches of government has absolute and unchecked power. I doubt if he will use this for the better of all of us rather then his select friends. The worst decision I ever made was voting for that guy back in 2000. A great leader would talk to us around the fireside, level with the people, and call for sacrifice. Bush, with that little smirk on his face, is asking that we "trust" him. I don't.
There is very little we can do right now other then watch our own backs. However, I'm open to suggestions...