SAN LUIS OBISPO, Calif. (MarketWatch) — Dateline December 2020. Let’s look back on the 2011-2020 decade, at what historians call the “Worst Decade in American History.” Totally predictable, totally denied.

Back in January 2011 we made 10 predictions of a chain of events that would reach a critical mass and consume America in a torrent of creative destruction, crippling capitalism and other outmoded institutions, forcing new power players to step out of shadows and assume leadership in a time of extreme crisis.Now we see how they came true.

“The U.S. economy appears to be coming apart at the seams,” Columbia Professor Robert Lieberman warned back then in the Foreign Affairs Journal. “Unemployment remains at nearly 10%, the highest level in almost 30 years. A long trend of “ballooning incomes at the very top and stagnant incomes in the middle and at the bottom. The share of total income going to the top 1% has increased from roughly 8% in the 1960s to more than 20% today. … a level of economic inequality not seen in the United States since the eve of the Great Depression.”

As the decade opened in 2011 we were being conned again, like before the 2008 meltdown — by the same crooks we bailed out.

The “Gilded Age” bubble from a decade ago ended in a crash worse than 1929, and left us on the brink of a Great Depression 2. We ended up with a decade of increasing battles between the haves and have-nots, where there is no longer room for “compromise” between the two ideologies destroying America from within.

“The Gap,” the divide, the greed, the entitlements, the hostilities are now so entrenched that “negotiations” are impossible and only a catastrophic 1929-style collapse of our self-destructive capitalism and a descent into economic hell will force America to restructure.

Here’s how we got here over the last 10 years:

2011. Wall Street’s super-rich spend billions to control Washington
Thanks to the conservative takeover of America’s so-called democracy the past three decades, from Reagan to Obama, our activist Supreme Court delivered the coup de grace into America’s psyche in 2010, overturning long-established precedent and giving rich owners of zombie corporations absolute rights of live humans, a decision that would have gotten a failing grade in my constitutional law class at the University of Virginia.

2012. Super-Rich gain absolute power over Washington
The bizarre decision, which essentially legalized political bribery, led to billions passing through lobbyists to politicians in all parties, with one goal: A guarantee that all politicians (President, Congress, Fed, regulators and state governments), all adhere to Reaganomics and the ideology that money talks and wealth rules.

As a result, America was no longer a democracy by 2012, not even a plutocracy.

2013. Pentagon’s WWIII global commodity wars accelerate for 2020 peak
Back during the Bush II presidency, Fortune analyzed a classified Pentagon report that predicted “climate could change radically and fast. That would be the mother of all national security issues.” Billions more people will increase unrest across the world, creating “massive droughts, turning farmland into dust bowls and forests to ashes.”

As a result, “by 2020 there is little doubt that something drastic is happening ... an old pattern could emerge; warfare defining human life,” confronting political leaders everywhere with the reality of our civilization collapsing, even the end of life on the planet. This was the year the hard evidence materialized.

2014. Global population bubble accelerating, wasting commodities
By now it had become clear that America’s Conspiracy of the Super-Rich was draining trillions from middle-class taxpayers. They see global population growth (exploding more than 100 million annually) not as a drain on scarce resources but only as a way to get richer through their obsession with free-market “globalization.”

They ignore the coming 2050 tragedies when global population is 9 billion, dwarfing America’s 400 million, and all are demanding more of the Earth’s limited, non-renewable commodity resources, and demanding payback from America’s long failure to heed warnings of environmentalists like Bill McKibben: “Act now, we’re told, if we want to save the planet from a climate catastrophe. Trouble is, it might be too late. The science is settled, and the damage has already begun.”

2015. Gilded Age globalization implodes America’s Global Empire
Around the time of the Pentagon’s WWIII prediction, historian Kevin Phillips warned in “Wealth & Democracy:’ “Most great nations, at the peak of their economic power, become arrogant and wage great world wars at great cost, wasting vast resources, taking on huge debt, and ultimately burning themselves out.”

Quote:


Vegi, I haven't actually read the book, but I have read nippets and viewed various video's, including the following -


Reich certainly has a point regarding the concentration of income at the top and the diminution of disposable income amongst the middle class!

As can be seen in the video, the top 1% of people took 23.9% of income in 1928, it then headed south for quite some time, bottoming out around 9% around the time the great Baby Boomer expansion started in the early 1980's, before peaking again at 23.5% in 2007.

However, I would hasten to add that this is not the only factor influencing events, there are actually a number of things pushing the Global Economy south and that will continue for some time.

The thing is, we need to swim with the current of this new Economic river, towards the shore & safety.

Alternatively, if we try to swim against the tide, because that's the direction that TPTB & Politicians had been going to, we will end up drowning.

As I have said previously, this is a new paradigm, but TPTB & the Politicians still don't want to rock THEIR OWN BOAT and as I see it, they probably won't accept change to the status quo, until faced with a catastrophe that finally wakes them & us!

Quote:


I don't entirely agree. I think that the paradigm of nature is the same as it ever was. This is an economic rip tide that will naturally occur when cheap energy supplies become harder to come by. Or where the demand outstrips the available supply.
Attempting to seperate economics and nature is of a world that we do not know as yet.
Dirty Harry had some good advice in that regard. "A man must know his limitations".

If you follow the rip, you will be carried out to sea and will eventually drown. Trying to swim against the current is aslo a fruitless exercise, and drowning will also be the result.
There is only one way to escape a rip, and that is to swim across it towards calmer waters to where there is no rip.
Once this has been accomplished, you can then begin the arduous journey back to shore if there is enough remaining energy to cover the required distance.
Our distance from shore is not decreasing IMO. Throwing money at the problem is attempting to swim against the natural rip tide IMO.

When reality sets in, the only logical conclusion will be that this planet cannot sustain the population that we now enjoy (?)
The top 1% will still be in power, so look the hell out. They will dictate what they require to maintain a semblence of wealth and power. They will readily accept that they must lower world population levels to a more realistic number. How this will be achieved is of a slight (sarc) concern.

So if we, the democratic public, are entrusting our governments to bring about a solution to the lack of required energy to sustain such a large population, then us airy fairy democratists probably deserve our natural and eventual reality...or the reality for our children, or children's children, which begrudgingly, is a reality that I haven't felt able to face.

I'm quite fine with risking my own skin, but the risks to future children would seem a selfish exploit considering my own personal rationalisations of what I see as the reality.

The calmer waters that we must swim to IMO, are not so friendly. They don't promise the required energy to sustain us all atm.

At this current point in time, many will drown in the future. Governments will secure lifejackets for themselves, and big businesses will continue to aim for a QE2 type luxury at the expense of others. They will also probably propogate measures to make their existence more economically sustainable - and that means getting rid of a good portion of the population.iii

World Food Prices Rise to Record on Sugar, Meat Costs

Jan. 5 (Bloomberg) -- World food prices rose to a record in December on higher sugar and meat costs, the United Nations said, exceeding levels reached in 2008 that sparked deadly riots from Haiti to Egypt.

An index of 55 food commodities maintained by the Food and Agriculture Organization climbed for a sixth month to 214.7 points, above the previous all-time high of 213.5 set in June 2008, according to a monthly report posted on the Rome-based UN agency’s website today. The gauges for sugar and meat prices advanced to records.

Sugar climbed for a third year in a row in 2010, and corn jumped the most in four years in Chicago. Food prices may gain further unless global grain production rises “significantly” in 2011, the FAO said Nov. 17. At least 13 people died last year in Mozambique in protests against planned increases in bread and water prices.

“There is still, unfortunately, the potential for grain prices to strengthen on the back of a lot of uncertainty,” Abdolreza Abbassian, senior economist at the FAO, said by phone today. “If anything goes wrong with the South American crop, there is plenty of room for them to increase further.”

Cereals, Cooking Oils

The FAO’s food-price indicator climbed from 206 points in November. Its gauge for sugar prices reached 398.4 points last month, increasing from 373.4 in November. The meat-price index rose to 142.2 points from 141.5.

The agency’s cereal-price index jumped to 237.6 points in December, the highest level since August 2008, from 223.3 the previous month. The indicator for cooking oils advanced to 263 points, the highest since July 2008, from 243.3. The index for dairy prices rose to 208.4 points from 207.8.

Global grain output will have to rise at least 2 percent this year to meet demand in 2011-2012 and avoid further depletion of stocks, the UN agency has said. Concern about dry weather in Argentina helped corn prices to jump 52 percent in Chicago last year.

Link -
http://noir.bloomberg.com/apps/news?pid=20601087&sid=auxwKmN9dWuw&pos=3
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None of this has yet to factor in the Queensland Floods and as yet, it only partly factors in the rising Energy costs!

It_is_the_Darkness wrote on Jan 6^th, 2011 at 12:05am:



I am pleased to see you both agree with me!

perceptions_now wrote on Jan 5^th, 2011 at 2:44pm:


That said, adversity usually bring out the best in people, but on this ocassion, due to the complexities involved, it will likely take a catastrophe to finally wake us up.

Depending on timing, where you are & the final outcome of complex events, we may actually face Stagflation for a while.

However, given the nature of the many headed Hydra that we face, I think the logical outcome (for quite some time) is De-Growth!


That is not someting that Economists, Politicians or most people want to hear, but given the following it is difficult to see another likely outcome.

1) The apparent direction of Demographics for the rest of this century.
2) The likely direction of Energy Production for the foreseeable future and how it fits with the current Global Economy.
3) The likely actions required, over the next 50-100 years +, in order to try to offset the worst effects of Climate Change.

And, that's without going into the fact that many of the worlds larger national economies are now broke, bankrupt or they soon will be!  

Personally, I mark the "public" moment of this financial crisis to July 2007, when two Bear Stearns hedge funds were both completely wiped out. Neither had anything to do with oil or oil trades. Both were highly leveraged funds that were simply in way over their heads. And those funds were symptomatic of the entire financial industry at that time.

The signs of the impending collapse had been building for a while. A few people had been pointing to the "Greenspan bubble" as early as 2005. I freely admit that I missed those calls in the 2004-2005 period but I won't deny that some people did make them. And that was well before oil prices spiked. So the fix was in long before.

The Greenspan bubble (or the last Greenspan bubble) came in response to the dot-com bust which was caused by the prior Greenspan bubble. See a pattern here yet? That prior Greenspan bubble happened during the era of $10 oil. Peak oil didn't burst that bubble either. The bubble popped because all such bubbles pop. And the reason it popped was nothing to do with oil prices and everything to do with herding behaviors as the herd recognized in a very short time frame that they had been sold a bill of goods.

Likewise the current bubble burst as toxic mortgages began failing causing the MBS based on those securities to fail, leading to catastrophic losses, starting with (for example) some of those hedge funds I mentioned. Again, this had nothing to do with peak oil and everything to do with herding behavior, as the holders of MBS began to realize that these securities would never pay back the capital invested in them, let alone the interest promised. None of these people cared about peak oil or were formulating positions based on peak oil. They were simply interested in recouping their capital and hopefully their promised profits, but if not, at least their capital. Instead they suffered massive losses of capital and zero profits because the financial instruments involved were created deliberately as acts of fraud by the banks that created them.

Did Peak Oil cause the Great Depression? Did Peak Oil cause the dot-com bust? Did Peak Oil cause the Tulip mania? Did Peak Oil cause the large recession after the Civil War? If it did not (and it did not, trust me) then why should I believe that "this time it's different"? The onus of proof is on those making the extraordinary claim that Peak Oil caused this recession. Yet I have never seen real proof that this is so. Sure, you can point to some correlations between oil price and financial crisis, but I can point to correlations of oil price and prior financial crisis before oil peaked in North America. Correlation is not causation. To establish causation requires a whole lot more work than just plotting a graph showing correlation and then proclaiming "See!" And that, so far, is all that anyone has done.

Peak oil will place a hard cap on the scope of recovery of the global economy, since the global economy is based on fossil fuels (primarily oil). That hard cap will limit and frustrate all political responses to the financial crisis and in the end, peak oil may be part of the cause of the fall of some governments over the next few decades. The natural limits to growth that we are approaching are going to affect us. Those limits were already impacting businesses that deal with energy and will slowly creep out to impact all of society. But peak oil did not cause human greed to run rampant. And peak oil won't stop human greed from trying to run rampant yet again someday. Remember that.

Link -
http://intothegreyzone.blogspot.com/2011/01/financial-crisis-was-not-caused-by-p...
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What's so difficult here, different issues, at different times, have or may have, different causes!

!929 had different causes to today and so did the early 1970's, the early 1980's and what happened after 9/11.

High Oil Prices Will Lead to an Oil Exploration Boom in 2011

Oil is like any other commodity: if price go up, people will produce more of it to sell. Despite the bleatings of peak oil sheep, oil companies are responding to recently elevated oil prices. Many are in fact scrambling to find and produce more oil.

From giants Saudi Aramco and Exxon Mobil Corp. to five-person wildcat outfits, the industry plans to spend nearly a half-trillion dollars next year to find and extract oil and natural gas, according to a new survey by investment bank Barclays Capital.

For the first time in several years, large Western oil companies are leading the industry's charge, increasing their budgets faster than the state-run national oil companies that have dominated spending in recent years.

"This is being driven by the appetite to find more oil, comfort that today's oil prices will be sustained and companies getting out of a hunker-down, recession mode," said James West, an energy analyst with Barclays, who co-authored the survey, which has been produced every year since 1982. _Rigzone

The key question oil executives as themselves is, "Will the high prices of oil stay high?" During the speculative runup in oil prices from 2007-2008, it was clear to most wise analysts that the high prices could not last. And indeed oil prices crashed to relatively low levels in 2009.

Oil has always been a boom and bust industry, with multiple price elevations followed inevitably by price crashes, and so on. That is one reason for the formation of OPEC -- the perceived need to maintain a stable price level for oil.

More on the investing side from Phil McPherson:

With the economy recovering, and as more people feel that the double-dip recession is not going to happen, oil prices are tending to stay stronger. However, it seems to me the tail is wagging the dog right now, with the U.S. dollar going down and the price of bonds being up, and the yield being extremely low. To me, it has more to do with the price of oil than necessarily the pure supply and demand fundamentals, because we still have excess supply of oil via OPEC. If you're bullish on oil or bullish on the economy, then you use those dips as opportunities to gain more exposure.

...But as with any business, when the demand is there and the visibility is there, entrepreneurs rise up to the challenge because they know they can make money. I think you're going to be surprised that in 2011 the likes of Halliburton Co. (NYSE:HAL) and Schlumberger Ltd. (NYSE:SLB), as well as lot of other smaller companies, are going to have more crews out working. There's going to be enough demand there. It's all a function of oil prices, and as long as they are in this relative range, people are going to continue to drill these wells. I don't think margin makes as much of an impact as the NAV that you can grow with these companies via drilling these wells and growing reserves. _IBTimes

The world is floating in hydrocarbons. North American shale gas has barely gotten started, and the technology for repeating that miracle is in high demand worldwide -- from Israel to China to South America.

As long as current oil prices remain above $70 (2010 dollars), exploration and production will continue to accelerate for both oil and wet gas. Higher prices -- above US $80, will spur even greater investment and faster development.

The next time someone tells you there is no flexibility in oil production, and that demand for hydrocarbons absolutely must continue to rise exponentially, you would be wise to bid the person a good day, and seek other companionship.

Link -
http://oilprice.com/Energy/Oil-Prices/High-Oil-Prices-Will-Lead-to-an-Oil-Exploration-Boom-in-2011.html
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What a load of CRAP!

As can be seen from the following chart, the Oil Price had been on the rise since 2002, before Peaking in 2008, diving to a low in early 2009 and it has since been surging upward again.

During all that time, with the massive Pricing incentive, what did Production do?

It hovered around, within a fairly narrow band, it did not keep up with Population or Demand increases and it certainly did nothing in response to the massive Pricing increases since 2002!  

Why has production not given the "Capitalist Response"?

Because most of the older established fields are Peaking and going into permanent decline and the newer, smaller fields coming on-stream are not of sufficient size to offset the depleting older fields.

So Production has now Plateaued, ahead of the inescapable, permanent post Peak downhill slid, of the Hubbert bell curve!

The next time someone tells you, "The world is floating in hydrocarbons", you would be wise to bid the person a good day!

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Some good points, well made!

What came (be-came Bankrupt) first ?

The Chicken (The US Federal Government)

The Egg (The FED)

And the answer is, Neither, because they both guarantee each other?

At least, that is A theory!

A theory that says, there are no consequences, for printing as much money as you want or taking on as much Debt as you want, so long as you are the main game in town.

I do not suscribe, to that point of view!