March 24, 2008
FINANCIAL AND OIL CRISIS
….where’s all the Iraqi oil profits?
From: R.F. in Wisconsin –
22 March 2008
Great article Dene. It’s absolutely unbelievable what these lending institutions have done with subprime borrowers. It’s a monumental scam. The system has been tweaked simply to make a few people rich overnight. It’s one big circle of greed. The people who have borrowed money at ridiculously terms to buy homes that they can't afford are also a part of the problem (and most of these borrowers own an equal share of the blame). Nobody forced them into these bad loans (and ignorance of what they were doing is a poor excuse). Many are now crying foul, and that may be true in some cases, but anyone who bellied up to the bar for instruments that most reputable banks won't touch (i.e. interest only loans) are people who want instant gratification. The subprime fiasco encompasses some 6 million American borrowers. That's a relatively small slice of the overall pie. Of course, 6 million subprime borrowers translates to hundreds of billions of dollars in defaulted loans (maybe even a couple trillion) so it’s a huge problem for everyone.
There's just one thing. This is a truly unique situation. We are a globalized society, and the West is the world's biggest consumer (lead, of course, by America). We aren't the Germany of the postwar era, and until the dollar is un-pegged from oil, I believe this house of cards can and will be largely sustained.
KEEPING PETROL TIED TO THE DOLLAR . . .
Too many other growing nations are dependent upon the current globalized trade network for their own survival. Nobody likes it, but there is NO other system to move to. Our government knows this. You are right in that America should be crashing and burning. By all previous economic models, we should be in great danger of disintegrating as a global power. I, however, don't think this will happen. The empire still has other levers it can (and will) pull. It pulled one such lever five years ago shortly after Saddam Hussein un-pegged Iraqi oil from the petrol-dollar. We all know what happened. America has since established a huge military presence with several powerful and permanent forward operating bases in this important region of the world. We have strategically positioned ourselves for what comes next.
Last month, Iran followed Iraq's lead and un-pegged its oil trade from the petrol-dollar to the Iranian oil bourse (this was hardly mentioned in the mainstream media). Nevertheless, it’s a huge story. And now, we hear the familiar drumbeat of war, and we, of all people, know exactly what's on the horizon.
The subprime meltdown will lead to a wider gap between the wealthy and the poor globally (this isn't just a local phenomenon). Check out the world markets, and check out how all citizens of this planet are facing even worse economic situations as a result of our interlinked global economy. Sometimes we don't look outside our own familiar surroundings. The standard of living is diminishing in all countries (truly it’s a much worse situation outside the US).
From: Dene McGriff to R.F. in Wisconsin and C.F. in Tulsa, OK – 9:42 AM
WHERE’S THE CASH FROM THE IRAQI OIL – WHO’S GETTING IT?
TAKING ON IRAN
FROM R.F. in Wisconsin -
WHERE HAS ALL THE OIL PROFITS GONE?
I think Dene has made a very important point, and I've sort of wondered about where all the "oil wealth" is going too. I mean, c'mon, it's been 5 years! Oil production went back online quite some time ago. I think "rebuilding Iraq" means a lot of things. I'm sure some of this money is going to infrastructure, but probably the infrastructure that the US needs most to network its interests in the war theater. I'll bet "rebuilding" also means MILITARY BASES. My commentary, however, is speculative. We should try to research this as Dene suggested. I have not seen anything meaningful written on this.
WILL THE MIDDLE CLASS IN AMERICA SURVIVE – I THINK SO?
It is surely possible that the middle class will be wiped out in the period ahead. Still, this is a major section of the population. I have mixed feelings about this. I'm not entirely convinced that the middle class will be wiped out; maybe just winnowed a bit. Perhaps my take on things is a bit skewed. I’m in manufacturing. I've been watching this situation very closely in so far our possible competition with the Chinese and Indians. It is not easy for Chinese and Indian suppliers to enter our market, and even if they could, they are too heavily burdened supplying units to support their own rapidly growing infrastructures (and this won't change anytime soon). This same story is true for other industries. We know this because we see (and anticipate) strong competition in our global supply chain. Lead times are longer than ever. I'm not suggesting that we (US manufacturers) won't experience a modest slow-down, but there are no indicators (other than the subprime market) showing that things are going to take a dive anytime soon. Business remains strong. I've had similar discussions with friends in other industries. Everyone is super busy.
I think it is possible that the middle class will survive (at least part of it, maybe even a large part of it). These people may be complicit in the crimes that lie ahead. They may willingly go along with the elites. When I read Revelation, this is exactly what I see happening. All of us will make a decision about the mark. If we get to make a decision, it logically follows that we are still plugged into the system (economy).
Just my two cents.
Happy Easter all.