Reading Tea Leaves
Here’s what I see: our economy is in the shitter, at least in part to the falling value of our currency. Much of the falling value of our currency is due to borrow and spend government policies, particularly with regard to the Iraq war. We’ve seen this before — Nixon had to take the US off the gold standard in ‘72 largely due to the costs of the Vietnam war. This corresponds roughly with the peak of standard of living for the average American — in terms of buying power and wages, it’s been pretty much downhill ever since then. Meanwhile, the rich have never been better off in this country, with the possible exception of the Roaring 20s. Which, of course, created the right conditions for the Great Depression. So am I saying that we’re heading for another Great Depression? Not necessarily. If my worst case scenario comes to light, we’re heading for something far worse. See, during the Depression we still had the resources available that the economy would eventually rely upon to help right itself. Today, although we are still the world’s greatest consumer of resources (I believe we consume about 25% of the world’s energy), China is now developing its economy in much the same way that we developed ours at the start of the last century — through manufacturing, and the consumption of massive amounts of natural resources. So I’m not sure that we have resources available to right the ship if it starts to founder. Further, I do not believe that any of our politicians will take problems seriously until they impact the super-rich. So my tea leaves tell me that the price of gas may well double soon, and that this will begin the collapse of our country as we know it. We will be disproportionately effected by expensive fuel relative to other countries, due to our dependence on cars. And that dependence is no coincidence, by the way. Our society depends almost exclusively on cars in part because GM bought up most of the country’s trolley lines in the early 1900s and shut them down, forcing people to buy cars to get around. We then built our towns and cities more spread out than other countries, because it was cheaper to do so, and there was no reason not to, as long as everyone had cars. So our whole economy will be threatened by rising fuel costs, but we won’t go quietly. I expect that we will turn on one another and our neighbors. Look for us to continue to solve our problems with our military. I think America is about to become a much less polite society, both domestically and abroad. Let’s hope I just got a bad batch of tea.