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Life After the Oil Crash
Deal With Reality or Reality Will Deal With You
Sorry for there being no update yesterday. The following excerpt is from a November 2008 NY Times article that explains what *really* caused the American Revolution:
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On to the day's news:
Editor's Note: This was the top article I linked on Wednesdya's upate but given the gravity of it, I think it deserves to be prominently linked for a few days. Please note that we're having two discussion of this article at the LATOC Forum. The first discussion is for those readers most intersested int he accounting and tax issues raised in the article. The second discussion is for those of us who are just flat-out pissed off:
What you need to know is the big picture: If America is circling the drain,Goldman Sachs has found a way to be that drain . . . The bank’sunprecedented reach and power have enabled it to turn all of America intoa giant pump-and-dump scam, manipulating whole economic sectors foryears at a time, moving the dice game as this or that market collapses,and all the time gorging itself on the unseen costs that are breakingfamilies everywhere – high gas prices, rising consumer-credit rates, halfeaten pension funds, mass layoffs, future taxes to pay off bailouts. All thatmoney that you’re losing, it’s going somewhere, and in both a literal and aQuite simply, the investment bank that is revered on Wall Street could justbe a bunch of crooks, and greedy ones at that. That's the view of GoldmanSachs delivered by an article in the current issue of Rolling Stone. The rockmag's The Great American Bubble Machine by Matt Taibbi says that theinvestment bank is responsible for creating, and in many cases popping,every great bubble of nearly the past 100 years in order to profit fromthem at our expense — and the article uses plenty of illustrations of pigs todrive home what it thinks of Goldman. Taibbi calls the U.S. a "gangsterstate, running on gangster economics." He says we have an economywhere "some of us have to play by the rules, while others get a note fromthe principal excusing them from homework 'til the end of time." And by"others" and "gangsters," Taibbi means the bankers of Goldman Sachs. If the aftermath of the credit crunch is a financial landscape featuringfewer banks, each even bigger than before because of government-engineered mergers and opportunistic takeovers of weaker brethren, thenwe should all be very afraid. That, though, is exactly where we are headed.The employment report is often said to be a lagging indicator, but someelements look toward the future and those signals aren’t encouraging. Thelength of the average workweek offers clues to when companies may beginhiring. Even if the rate of decline in jobs is moderating a bit from lows hitearlier this year, the addition of new workers seems to be a way off . . .. . . thousands of vendors who provide goods and services to the state willbe given IOUs instead of cash. From a company that sells french fries forprisoners to a firm that pumps out latrines in state parks, many businessesare trying to save cash and hoping their banks will accept the IOUs. StateController John Chiang expects to disburse $3.36 billion in IOUs and $10.9billion in regular payments this month. After officials decide this morninghow much interest they'll pay on the IOU, the controller's printing presseswill churn out the first batch of IOUs for 28,742 state tax refunds totaling$53.3 million, said Garin Casaleggio, a spokesman for the controller. With California a day away from issuing IOUs instead of paying its bills, Gov. Schwarzenegger and the legislature remain at odds over how to close anow $26.3 billion deficit. Schwarzenegger on Thursday ordered a thirdunpaid furlough day for 235,000 state employees. With its $1.7 trillioneconomy sputtering and 11.5% unemployment surging, California's difficultyin balancing its budget could affect the national recovery. But the seeds forthe Golden State's budget problems were planted more than 30 years ago.Just how big the foreclosure wave will be is unclear. But loan defaults areup sharply. And with many government and banks' self-imposed foreclosuremoratoriums expiring, the biggest lenders indicate that they are likely tomove more aggressively to clear up a backlog of troubled mortgages . . .Landmark Mall in Alexandria is part of a growing list of ailing shoppingcenters across the country that have borne the brunt of the recession.Owner General Growth Properties unveiled ambitious plans five years ago toremake the 52-acre center into a suburban oasis of office buildings, homesand shops. But the process was dogged by delays, and now the financialcrisis has delivered a triple whammy. General Growth filed for bankruptcyprotection this spring. The credit crunch has dried up the market for the$2 billion in capital required for the makeover. And consumers just aren'tshopping, with the discretionary purchases taking the biggest hit . . .In the beginning, there were 9 volunteers for the trek through the Alaskawilderness. The twist is, the most experienced members were the first togive up. Turns out, since they were the ones with the most knowledge,they couldn’t transition to group membership. Frustration, anger andsheer pride caused them to lose their edge, and to quit. Since it is a TVshow, they just had to push a button and have a helicopter come in andpick them up. In real life, they’d have to strike out on their own, go off anddie, or figure out how to play nice in the sandbox [with the others . . .]Our world is a-swirl with forces building hurricane speed, each having animpact on the others. The concatenation of instability in the bond andstock markets, housing and commercial real estate, the mushroom cloudof increased “money” supply, job losses developing in the auto and tobaccoindustries due to recent legislation, the Chinese and Japanese at least eyingmanipulating our currency or replacing the dollar as the standard againstwhich other currencies float, and the possibility that the government isgoing to appropriate the health industry are just some of the warning signsthat indicate it is time to head for the storm cellars with the kiddies, thelivestock, a kerosene lantern, a good book, and an enormous picnic lunch.___________________________________________________________________
Best of the LATOC Archives:
Prepare psychologically for a sociopolitical climate of anger, grievance, andresentment. A lot of individual citizens will find themselves short of resources in the years ahead. They will be very ticked off and seek toscapegoat and punish others. The United States is one of the few nationson earth that did not undergo a sociopolitical convulsion in the pasthundred years. But despite what we tell ourselves about our specialness,we're not immune to the forces that have driven other societies to suchextremes. The rise of the Nazis, the Soviet terror, the genocides - theseare all things that can happen to any people driven to desperation . . .But Vermont is not the only place where people can and should get to knowtheir local farmer. Opportunities to do so exist almost everywhere in NorthAmerica. As I have learned more about organic farming, and particularly asI have consumed vast quantities of raw milk and gotten to know the peoplewho produce it, I'm deeply motivated to invite Truth To Power readers tocreate similar opportunities in their local communities. I cannot stress theurgency of this. The U.S. financial system is in collapse, and energy costsare likely to come back again next spring and summer with a vengeancethat we can't imagine. This will make the price of food, already off thescale, skyrocket even further. We must all get to know our local farmers.Rationing and shortages affected almost every area of everyday life. Coal,petrol, cars, clothes, footwear, furniture, bedding, toys – all were hard tocome by, being either strictly rationed or near unobtainable. But for mostpeople, there was during these years one overriding obsession: food . . . For the colonists, as for us, first came the boom. During the height of the French and Indian War, which lasted from 1754 until 1763, money flooded into the colonies . . .
All that cash sloshing around resulted in lavish displays of wealth — notably by British officers, whose opulent living was emulated by the locals, especially in New York.
Housing prices soared during the war. But when credit tightened afterward — thanks in no small part to a prohibition on the issuance of paper money by the colonies under the Currency Act of 1764 — real estate owners who could not pay their debts lost their land.
At the core of the Wright-Michener argument is that this confluence of nasty economic circumstances was what produced the anger that found expression in rebellion against the Stamp Act and other British taxes. In other words, the core economic culprit was a boom-bust cycle; convinced that their future was no longer in their hands, the colonists could summon the ghost of John Locke, setting the stage for the Declaration. Source
It's worth noting that, at least acccording to Wayne Madsen, select members of Congress were warned in April 2008 that if the economy continued to fall apart there would likely be some type of citizen revolt:
On April 3rd, 2008 investigative reporter Wayne Madsen published the following about a secret meeting during which senior members of Congress were warned that #1) the U.S. economy would soon collapse and #2) this collapse would lead to conflict and/or revolution among the population. In light of the events of the last two weeks - both the financial collapse the fact the Pentagon is now bringing a combat brigade back from Iraq to be incorporated into Northcom for domestic civil unrest (Source) - it is definitely worth revisiting:
WMR has learned from knowledgeable sources within the US financial community that an alarming confidential and limited distribution document is circulating among senior members of Congress and their senior staff members that is warning of a bleak future for the United States if it does not quickly get its financial house in order.
House Speaker Nancy Pelosi is among those who have reportedly read the document.
The document is being called the "C & R" document because it reportedly states that if the United States defaults on loans and debt underwriting from China, Japan, and Russia, all of which are propping up the United States government financially, and the United States unilaterally cancels the debts, America can expect a war that will have disastrous results for the United States and the world.
"Conflict" is the "C word" in the document
The other scenario is that the federal government will be forced to drastically raise taxes in order to pay off debts to foreign countries to the point that the American people will react with a popular revolution against the government.
"Revolution" is the document's "R word"
The origin of the document is not known, however, its alarming content matches up with previous warnings from former Comptroller General David Walker who abruptly resigned as head of the Government Accountability Office (GAO) in February of this year after repeatedly publicly warning of a "financial meltdown" disaster if America's $9 trillion debt was not addressed quickly. Financial experts have warned that the national debt, corrected for inflation, could reach $46 trillion in the next 20 years. A month earlier, Walker warned the Senate Banking Committee about the reaction of creditor nations in Asia and Europe if the U.S. did not address its debt problem. Source
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