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host · 03-15-2006, 11:50 AM

Quote:

Originally Posted by tecoyah

This is by far....the most rediculous suggestion I have ever heard. World War III is not a cure for the United States Financial Woes.

tecoyah, I strongly suspect that the "rest of the world" already knows what the U.S. will "end up" doing, and if we're going to "do it", the best chance for a survivable outcome is to do it sooner, before the countries that we go up against become better prepared to oppose our attacks, and before the dollar erodes our ability to finance preparations and the initial offense.

I say this because I see no alternatives, other than the description in my last post, of half the families in North Carolina sliding below an minimum income that even then, budgest only necessities....it does not even include paying down debt or budget for cable TV fees. Do the Chinese grow richer, while we grow poorer, do we sit on our military assets, while they rust, as the Soviets did, or do we attempt to make our military "pay it's own way", via the "plunder" it might bring back to the homeland. I think that our elected federal leaders already have decided to do, what the rest of the world suspects that
we will do....and that the only ones who have yet to mull over the idea, and to have it sink in, are the American people.

Quote:

http://news.bbc.co.uk/2/hi/business/4807844.stm
US Federal Reserve chairman Ben Bernanke has voiced concerns over the size of the US budget deficit.

Mr Bernanke warned persistent deficits need to be curbed, particularly as an ageing population will raise pressure on government spending.

Widening the deficit would put future living standards at risk, he added.

"As a result, I think it would be very desirable to take concrete steps to lower the prospective path of the deficit," he said.

The comments came in a letter - dated 9 March - to Senator Robert Menendez following his statement to the Senate Banking Committee on February 16.

Ageing population

The letter said Mr Bernanke was quite concerned about the "intermediate to long-term federal budget outlook"....

Quote:

http://www.usatoday.com/money/econom...con-usat_x.htm
Posted 3/14/2006 10:28 PM
U.S. trade deficit balloons to $805B
By David J. Lynch, USA TODAY
WASHINGTON — The most complete scorecard of the United States' international trade performance deteriorated to a record $804.9 billion deficit in 2005, the Commerce Department said Tuesday.

The "current account" deficit, including trade in goods, services and investment income, was 20.5% greater than 2004's $668.1 billion figure and more than twice as large as just four years earlier. "It's going to start to snowball. ... We're at a tipping point," says Catherine Mann of the Institute for International Economics.

No industrial nation has ever run a deficit this size, equal to 6.4% of economic output.

The dollar buys less than half the gold or silver that it bought in 2001
http://www.kitco.com/gold.londonfix01.html
March 15, 2001 Gold $262 oz. Silver $4.42 oz.

http://www.kitco.com/gold.londonfix.html
March 15, 2006 Gold $551 oz. Silver $10.25 oz.
The dollar buys less than half the oil that it bought in 2001

Quote:

http://www.globalsecurity.org/military/intro/oil.htm

......In November 1998 the Energy Information Administration released a forecast of World Oil Prices out to the year 2020. At that time, oil prices were some of the lowest since the early 1970's, and that even by 2020 we expect oil prices in real 1997 dollars to reach only $22.73. These projections are from the reference case of the Annual Energy Outlook 1999...........

......In the AEO2005 reference case, the annual average world oil price increases from $27.73 per barrel (2003 dollars) in 2003 ($4.64 per million Btu) to $35.00 per barrel in 2004 ($5.86 per million Btu) and then declines to $25.00 per barrel in 2010 ($4.18 per million Btu) as new supplies enter the market. It then rises slowly to $30.31 per barrel in 2025 ($5.07 per million Btu). As recently as April 13, 2005 Guy F. Caruso, Administrator of the Energy Information Administration, was briefing these results.

But The EIA's Short-Term Energy Outlook – April 2005, released 07 April 2005, told a very different story. During the first quarter of 2005, West Texas Intermediate (WTI) crude oil near-month contract futures prices averaged $49.77 per barrel, rising nearly $14 per barrel over the 3-month period. Higher crude oil prices over this period reflected, in part, market expectations of robust world demand, limited increases in non-Organization of Petroleum Exporting Countries (OPEC) production, and uncertainty about crude oil supplies from continuing volatile situations in Iraq, Nigeria, and Venezuela. Traders and oil market analysts seemed focused on the latter part of 2005, projecting continued strong demand growth with very little spare production capacity available. Nevertheless, since their April 1st peak, crude oil prices tumbled more than 9 percent to $51.86 per barrel by April 12, 2005.

The average West Texas Intermediate (WTI) crude oil price for the first quarter of 2005 was $49.77 per barrel, approximately $14.50 per barrel higher than in the first quarter of 2004 and $1.10 per barrel above the first quarter 2005 projection in the previous Outlook. WTI prices are projected to remain above $50 per barrel for the rest of 2005 and 2006. Oil prices are likely to be sensitive to any incremental oil market tightness. Imbalances (real or perceived) in light product markets could cause light crude oil prices to increase to levels above the $55 per barrel average projected in the Outlook.......

.......On 09 August 2005, New York's main contract, light sweet crude for delivery in September 2005, climbed 54 cents to $63.61 per barrel in electronic trading. The contract had struck $64.27 late on 08 August 2005, the highest level since it was first traded in 1983.

In contrast to most other oil-price-spike episodes, this time the far futures price of oil -- that is, the price for contracts seven years out -- has also risen sharply. This correlation seems to indicate that the present oil price increase is not viewed as a purely temporary shock. It is virtually inevitable that shocks will result in some combination of higher inflation and higher unemployment for a time.........

Hurricane Katrina did not strike until three weeks after the oil futures contract reached $64.27 per bbl.....

Quote:

http://www.commondreams.org/views04/0105-08.htm
Published on Monday, January 5, 2004 by CommonDreams.org

How Will Bush Deal With the Deficits? Connecting the Dots to Iraq
by Robert Freeman

How does a nation deal with debts that so greatly outrun its ability to pay? There are basically only five strategies. All are unappealing. Most are calamitous.

The most difficult strategy is, not surprisingly, the honest one: raise taxes and pay your bills. This is what King George III did following the Seven Years War with France in 1763. England had quadrupled its national debt in fighting the War and needed money to pay it off. It turned to the richest people in the realm, the Colonists, and began taxing paper, glass, paint, lead, and, of course, tea. The result, as we know, was the American Revolution......

....Finally, there is plunder. When a nation's debt load becomes so huge it cannot plausibly reassure creditors regarding repayment, it must seek some source of wealth, any source, to keep the borrowed money flowing. This, naked predation, is what kept the Roman Empire alive for the last two hundred years of its existence. It is the strategy adopted by the Spanish Empire-silver and gold from America-and which eventually destroyed the vitality of its own merchant and civil servant classes.

Government economists are not unawares of these imperatives. So, which of the five above strategies has the U.S. adopted to deal with its exploding debt problem?.........

.......So what to do?.........

.......Clearly, the Bush administration will not adopt the first strategy, raising taxes.......

.....Finally, then, we come to the most sensitive and incendiary debt management strategy of all. Plunder. The purported rationale for the U.S. invasion of Iraq-that it possessed Weapons of Mass Destruction-is now known to have been a wholesale fiction. Not a single one of the administration's dozens of claims of WMD possession or imminent threat have borne the scrutiny of the most massive inspection regime in history. Of all the world's people, only the thuggishly propagandized American people ever believed (or still believe) this to have been the real purpose for the War. Not even Bush himself pretends otherwise anymore.

And the ex post facto rationale-that we are bringing Democracy to Iraq-is equally fictive given Paul Bremer's statement that the U.S. will not allow a Shi'ite government to take control there. Shi'ites, as Bremer well knows, make up 60% of Iraq's population. And no, it's not links to terror. And no, it's not connections to 9-11. What then? A simple thought experiment demonstrates the real truth about the U.S. invasion: would the U.S. have carried it out if, instead of sitting on the world's second largest supply of oil, Iraq was the world's second largest producer of, say, pomegranates? Or figs? Only the most pathologically Republican of cynics can even pretend to give this question a thought.

Control of oil gives the U.S. control of the industrial world and effective control of its own strategic competitors, Europe and China. This is the same strategy that made Alexander the Great so Great. As he entered new territories in pursuit of conquest, the first thing Alexander always did was capture and fortify the local water well. Within a day, two at the most, resistance collapsed. Oil is the water of today. It is the most widely traded commodity in the world. It is the one commodity without which modern civilization cannot function.

Control of oil allows the U.S. to extract all of the surplus wealth created by its rivals, ensuring that they remain forever subservient. This explains why Europe and China were so vociferous in their denunciation of the War. It also ensures that the U.S. has a universally desired, fungible, liquid commodity to collateralize its massive debts. Iraqi oil is a magical two-fer: it solves the U.S.'s primary strategic and economic challenges in a single fell swoop. But its capture can only be justified by deceit and accomplished through plunder.

The problem for most of Bush's Democratic challengers is that they know the above situation to be true. That is why-Howard Dean and Dennis Kucinich excepted-they went so sheepishly along with Bush's notoriously transparent casus belli in Iraq. They are left with petty quibbling about the adequacy of post-invasion planning. It is why they raised hardly a peep of protest over the ramming through of the Medicare package. It is why they bleat only procedural protests about the incivility of discourse as the three-quarters-of-a-century legacy of the New Deal is being peremptorily dismantled.

There was a time in the late 1990s when it looked as if the U.S. might be able to regain control of its fiscal destiny. Bill Clinton reversed the suicidal predations of Reagan's Supply Side Economics and produced the longest sustained economic expansion in U.S. history. One of the byproducts of that expansion was a series of budgetary surpluses that allowed the government to begin paying down the crippling debts run up under Reagan and Bush I.

But that halcyon era is already just a memory. Bush's massive debts are the nation's new fiscal master. And they have been run up solely to further enrich the already extremely wealthy the expense of the still desperately needy. The staggering costs of servicing these debts will drive interest rates into the stratosphere, destroying all possibilities of rebuilding a competitive economic infrastructure. The conservative British business magazine, The Economist, said it most presciently: "Long after Dubya is back on his ranch, Americans will be trying to recover from the mess he created."

It is breathtaking to imagine it could have happened so quickly but all federal policy, indeed, decisions concerning war and the very character of the nation itself, will now be defined by the stark new fact of our collective indenture.