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Now I hope people don’t see this article as ‘support for the Soviet Union’ or something ridiculous like that, but I think this is a very insightful and amusing article, based on a powerpoint presentation. The question is, was the USSR more prepared for the economic collapse it suffered than the US is for the collapse it will soon suffer? Orlov lived through the former and seems to think that it was.
Also note that I strongly disagree with his recommendation to abandon politics – he’s right that politicians are swine but i think he’s wrong in overlooking people’s ability to build a resistance movement that can make real changes to our society, despite politicians best efforts to derail it. So with that, enjoy the article! [alex]
Closing the ‘Collapse Gap’: the USSR was better prepared for collapse than the US
by Dmitry Orlov
Originally published be Energy Bulletin, December 4, 2006.
Good evening, ladies and gentlemen. I am not an expert or a scholar or an activist. I am more of an eye-witness. I watched the Soviet Union collapse, and I have tried to put my observations into a concise message. I will leave it up to you to decide just how urgent a message it is.
My talk tonight is about the lack of collapse-preparedness here in the United States. I will compare it with the situation in the Soviet Union, prior to its collapse. The rhetorical device I am going to use is the “Collapse Gap” – to go along with the Nuclear Gap, and the Space Gap, and various other superpower gaps that were fashionable during the Cold War.
Slide [2] The subject of economic collapse is generally a sad one. But I am an optimistic, cheerful sort of person, and I believe that, with a bit of preparation, such events can be taken in stride. As you can probably surmise, I am actually rather keen on observing economic collapses. Perhaps when I am really old, all collapses will start looking the same to me, but I am not at that point yet.
And this next one certainly has me intrigued. From what I’ve seen and read, it seems that there is a fair chance that the U.S. economy will collapse sometime within the foreseeable future. It also would seem that we won’t be particularly well-prepared for it. As things stand, the U.S. economy is poised to perform something like a disappearing act. And so I am eager to put my observations of the Soviet collapse to good use.
Slide [3] I anticipate that some people will react rather badly to having their country compared to the USSR. I would like to assure you that the Soviet people would have reacted similarly, had the United States collapsed first. Feelings aside, here are two 20th century superpowers, who wanted more or less the same things – things like technological progress, economic growth, full employment, and world domination – but they disagreed about the methods. And they obtained similar results – each had a good run, intimidated the whole planet, and kept the other scared. Each eventually went bankrupt. Read the rest of this entry »
This is a new article written by my friend and mentor, Jerry Silberman. I helped him edit it, so if anyone wants to discuss these issues, i’m available! [alex]
The Last Recession? Or Our Best Opportunity for Hope?
by Jerry Silberman
Originally published by Energy Bulletin, November 7, 2008.
As the drama of the bursting bubble of Wall St. gives way to a slower, but steady and painful, economic decline, the first and most important question we should ask is “Should we try to blow another bubble, or should we reject bubble culture values for something entirely different?”
If we agree that we need a new culture, this leads to the question “Can we take advantage of the opportunity afforded by this collapse, by the exposure of a failed system, to establish new “rules for the house” (the root meaning of “economy” from the Greek)?”
If the house, metaphorically, is Planet Earth the way we have enjoyed it for millennia, then making the choice now to change to a sustainable economy is the best way to turn the apparent lemon of this economic contraction into the best lemonade in history. Read the rest of this entry »
Originally published by Common Ground Magazine.
By Daniel Pinchbeck
Witnessing the unraveling of the global financial system, I find myself gripped by contrasting emotions. While part of me feels like heading for the hills and hoarding cans of sardines, another part of me is giddy, almost celebratory. The tyrannical rule of Wall Street is ending, along with the self-serving free market ideology of Neoconservatives. The massive amounts of fictitious capital created by our corrupt financial system must be destroyed, so we can address our immediate situation on this planet.
I feel sorry for the millions of people who may suffer during a transition that will be extremely difficult. On the other hand, our rapacious economic system is destroying the integrity of the biosphere, threatening our future as a species. Taking a wider perspective, we can see a new social structure that creates sustainable patterns of behavior is necessary, if we want our descendents to continue on the earth.
In my last book, I looked at many predictions of systemic financial dissolution at this time. I discussed the possibility that a financial H-bomb could melt down the economic system while leaving the “tangible assets” — people, infrastructure, land — still standing. I suggested this could be the best thing to happen to our world. Such a systemic collapse is a tremendous opportunity to change the direction of our society. Those who believe civilization can be run according to different principles — humane, equitable, and collaborative ones — need to step forward now with concrete proposals and put ideals into practice.
Several factors made the collapse of the global financial system inevitable. One problem with capitalism is that it is not self-sufficient, but depends on the constant availability of new markets, forcing expansion by creating ever-increasing amounts of debt. We now have a globalized world market, so exploitation of new territories can no longer take place. As Naomi Klein analyzed in The Shock Doctrine, this led to a policy of “disaster capitalism,” where cataclysms like hurricanes and terrorist acts were seized as opportunities to redevelop internal markets. Such a practice is inherently unsustainable.
Another crucial element that is rarely discussed in the media is the connection between the current financial meltdown and peak oil. Just as our debt-based economic system needed new markets to penetrate, it also required an ever-increasing supply of cheap energy to fuel its expansion. The decreasing supply of fossil fuels relative to global demand has brought the second law of thermodynamics into play, breaking the delusionary spell cast by the financier-sorcerers, who decoupled financial value from real value back in the early 1970s. When we consider the permanent reduction in the supply of cheap energy combined with the lack of new markets, it is obvious the amassed debts will never be repaid. Read the rest of this entry »
this is a nice article that sums up the current financial crisis and some of its global implications. the major piece which is missing, as usual, is an understanding of how global capitalism, and the American Empire in particular, has been propped up by a sea of oil, how the depletion of that oil has sparked this collapse, and why the deepening shortage of oil will prevent anything similar to this capitalist system from coming back, ever again. i’ll try to write an article to explain this soon. [alex]
Death of the American Empire
America is self-destructing & bringing the rest of the world down with it
by Tanya Cariina Hsu
Originally published by Global Research, October 23, 2008.
I believe that banking institutions are more dangerous to our liberties than standing armies. (Thomas Jefferson, US President; 1743 – 1826)
America is dying. It is self-destructing and bringing the rest of the world down with it.
Often referred to as a sub-prime mortgage collapse, this obfuscates the real reason. By associating tangible useless failed mortgages, at least something ‘real’ can be blamed for the carnage. The problem is, this is myth. The magnitude of this fiscal collapse happened because it was all based on hot air.
The banking industry renamed insurance betting guarantees as ‘credit default swaps’ and risky gambling wagers were called ‘derivatives’. Financial managers and banking executives were selling the ultimate con to the entire world, akin to the snake-oil salesmen from the 18th century but this time in suits and ties. And by October 2009 it was a quadrillion-dollar (that’s $1,000 trillion) industry that few could understand.
Propped up by false hope, America is now falling like a house of cards. Read the rest of this entry »
Worth watching this 3 minute video for an incredibly clear and concise explanation of Peak Oil and why it’s the source of this economic collapse, by Dr. Richard Heinberg. The near-term forecast for the economy is probably a series of large swings up and down, but as the oil shortage deepens the long-term trend will be an accelerating decline in economic activity.
For more, see this short explanation of why the current drop in oil prices is only temporary… (once again – my normal disclaimer – don’t hold me to everything he says here.. particularly not the “markets may be efficient…” statement) [alex]
“The Magic Market”
Richard Heinberg
Originally published by Post Carbon Institute, Oct. 13, 2008.
As the world finance system disintegrates and the price of oil wafts below $80 a barrel, we are about to see yet another instance of Market Magic.
Demand for oil is falling as world economic activity sputters. Many analysts are now forecasting that the barrel price could go as low as $50 to $60 in the next few weeks.
Meanwhile, however, the marginal cost of bringing a new barrel of oil into production has been rising in recent years, and now stands in the range of $80 to $100. Therefore, as the spot price and futures prices weaken, efforts to develop new oil sources will be mothballed. Read the rest of this entry »
This is a very provocative idea, but an important one. If collapse is inevitable, is it a case of ‘the sooner, the better’? Good article overall, though I think a stronger anti-capitalist analysis is needed here. [alex]
‘The best outcome is probably for humans to hit the wall soon and hard.’
By Roger Baker / The Rag Blog / October 2, 2008
Is industrial collapse the BEST way out of our current economic mess?
Arguably yes and here is why. But does it even matter? Perhaps not. Capitalism, in its global form and as we now know it, is likely finished in any case, so the choice is likely to be an illusion. But the best outcome is probably for humans to hit the wall soon and hard.
The Economic Context
Capitalism as an economic system depends on an endless expansion of material goods production at a rate that allows lenders to earn interest on money saved and invested. The only way to get potential lenders to lend rather than spending their money immediately is to reward them with a real rate of return on their savings. This is done by promising lenders that they will be rewarded with the ability to buy more material goods in the future. A reward must be offered to lenders for not buying and stockpiling bars of gold, barrels of oil, or any other desirable goods or services now as opposed to putting their money in banks or investing it in stocks or bonds or whatever else can earn them a real rate of interest as a reward for offering their savings up for investment by others.
Keynesian economics tries to maintain a mild inflation rate of a percent or two in order to encourage people to save their money in banks and other alternatives that offer a return above the rate of inflation. This is necessary to keep people from simply putting their money under a mattress. If the rate of inflation is one percent and they can earn three percent in a bank, they will bank their spare funds and will, in theory, be able to come out ahead and buy two percent more in the amount of physical goods or services than they had originally put in.
That is how those managing the economic system (like the Federal Reserve representing the banks) try to set things up. It is meant to encourage people to behave predictably and to keep them saving and investing. Under conditions in which in which it is possible to keep the material world always expanding and yielding a production of desirable goods at or above the rate of interest on money saved, this system remains viable and stable. This assumes that the financial system has been well-managed, and that there are no external limiting factors.
Enter Peak Oil
We now live in a world economy that is rapidly approaching the limiting factor of fossil fuel energy sources. The specific limiting factor that is most relevant is a looming shortage of liquid fuel based on petroleum as the total world oil production peaks and declines.
The peaking of world oil production strongly affects the investment equation that underlies the global capitalist economy and rewards investments and savings. The global economy is based on a cheap-oil-related infrastructure for its expansion of the production of real goods. Capitalism requires cheap energy to deliver the exponential expansion of material goods through investments that can pay real interest rates on loans. But this expectation is probably more than the expansion an oil-addicted global production system can really deliver. It changes the system’s economic potential by making it impossible to earn a real rate of return on the money saved by lenders, who in the case of the United States have increasingly been foreign lenders.
The underlying problem is that nobody can think of a way to keep expanding the material production of a global economy that is experiencing a shrinking supply of liquid fuels. These oil-based fuels move almost all goods in our global economy. This economy is based everywhere on the cheap transport of people, goods, and the capital goods needed to expand global production, whether it be by ship, by rail, by road, or by air. When the ability to move almost all goods declines, the expansion of the ability of capitalist investments to exploit nature for human uses must also decline. Read the rest of this entry »
I’ve reposted a nice article which highlights the class dynamics at the heart of the current financial meltdown and potential bailout. It gives a very simple and straightforward summary from a revolutionary point of view, so I’m reposting it.
This is by no means a complete analysis however – for example it overlooks the critical role of oil, which is the lifeblood of the US capitalist economy and motivates many of its military aggression around the world. Specifically, there is a need to understand how the peak in global oil production has affected and continues to undermine the US-led industrial capitalist system, particularly in regards to the bursting of the housing bubble in the first place, along with the rising gas prices, food prices, heating costs, and subsequent inflation of the failing dollar.
Because oil production will never recover to its 2005/6 level, but will continue to decrease more rapidly, there can be no long-term recovery of the global financial markets, and for that reason I disagree with the declaration here that “Capitalism will not collapse…” On the contrary, it WILL collapse, because any system that structurally depends upon constant growth and speculation-upon-that-growth cannot coexist forever on a finite planet where necessary and crucial resources are in permanent and deepening shortage.
The current economic crisis is often compared to other historical crises of capitalism, where after appearing on the verge of death, the system restored itself and came back stronger than ever. Thus we are warned that capitalism is a self-destructive beast, but not a suicidal one. On its face this is solid logic but it overlooks the specific nature of the current crisis and its roots in the global peak oil phenomenon. It is my contention and the purpose of this website to demonstrate that the oil crisis is sucking global industrial capitalism dry like the vampire it is, and that there is no combination of “alternative” energy sources – whether coal, gas, nuclear, ethanol, wind, solar, whatever – that can do for this system what oil does.
Oil is not only the largest energy source, it also provides the material for 99% of pesticides (along with the entire industrial agriculture system), all plastics, almost all pharmaceutical drugs and chemicals, and a massive array of other products and components that keep the industrial economy chugging along. But the real killer is that oil literally fuels almost all transportation of materials and people for this system, including 95% of transportation in the US itself, as well as essentially ALL global air and sea transport. There is simply no way to keep this monster running without more and more petroleum.
Now, just because we’re confident that capitalism won’t recover from the current death-blows doesn’t mean a more vicious and destructive system won’t replace it, which is why this article’s conclusions are relevant and necessary. If we’re headed in the US towards fascism – which is where the rich and their Washington cronies seem to want to take us to protect their wealth and power – the only solution, which will become more and more apparent daily, is to organize a massive resistance here in the US that can stop the vampires and build towards a society based on freedom, justice and democracy.
[alex]
SOME TALKING POINTS ON THE FINANCIAL CRISIS
By Kate Griffiths and Isaac Silver
1. The era of the United States as a “the world’s only superpower” is ending.
The United States economy has not been this bad since the Great Depression. The rulers of the US hoped to retain global power militarily, through the wars in Iraq and Afghanistan, as the country’s raw economic superiority slipped. But these wars cannot be won: opposition among the occupied populations, and growing dissent within the military, prevent any victory on US terms even as the death toll climbs.
2. Beginning during the 1970s, manufacturing stalled, while government and investors focused on the financial sector: banks, real estate, and insurance.
Increasing competition, strong unions, and victories of the Black freedom movement had begun to limit the profits made by US corporations and threaten the power of the ruling class. In response, employers shifted good-paying manufacturing jobs overseas and to nonunionized areas of the USA. As wages stagnated, and workers’ purchasing power declined, workers maintained a precarious hold on our livelihood through working longer hours, sending more household members to work, and buying extensively on credit. The globalization of US capitalism and growth of credit both fueled the financial sector, which provided fluid economic resources that could be quickly moved and re-invested – unlike a physical investment such as a factory or railroad.
3. In 2008, years of government policies favoring the rich provoked instability and sparked collapse of major Wall Street institutions.
As the cost of the basic necessities went up, and wages failed to cover them Read the rest of this entry »
See this website to find the nearest Emergency Rally, or organize one yourself!
Originally an email by Arun Gupta of The Indypendent, September 22, 2008.
Forward widely….
Everyone,
This week the White House is going to try to push through the biggest robbery in world history with nary a stitch of debate to bail out the Wall Street bastards who created this economic apocalypse in the first place.
This is the financial equivalent of September 11. They think, just like with the Patriot Act, they can use the shock to force through the “therapy,” and we’ll just roll over!
Think about it: They said providing healthcare for 9 million children, perhaps costing $6 billion a year, was too expensive, but there’s evidently no sum of money large enough that will sate the Wall Street pigs. If this passes, forget about any money for environmental protection, to counter global warming, for education, for national healthcare, to rebuild our decaying infrastructure, for alternative energy.
This is a historic moment. We need to act now while we can influence the debate. Let’s demonstrate this Thursday at 4pm in Wall Street (see below).
We know the congressional Democrats will peep meekly before caving in like they have on everything else, from FISA to the Iraq War.
With Bear Stearns, Fannie and Freddie, AIG, the money markets and now this omnibus bailout, well in excess of $1 trillion will be distributed from the poor, workers and middle class to the scum floating on top.
This whole mess gives lie to the free market. The Feds are propping up stock prices, directing buyouts, subsidizing crooks and swindlers who already made a killing off the mortgage bubble.
Worst of all, even before any details have been hashed out, The New York Times admits that “Wall Street began looking for ways to profit from it,” and its chief financial correspondent writes that the Bush administration wants “Congress to give them a blank check to do whatever they want, whatever the cost, with no one able to watch them closely.”
It’s socialism for the rich and dog-eat-dog capitalism for the rest of us.
Let’s take it to the heart of the financial district! Gather at 4pm, this Thursday, Sept. 25 in the plaza at the southern end of Bowling Green Park, which is the small triangular park that has the Wall Street bull at the northern tip.
By having it later in the day we can show these thieves, as they leave work, we’re not their suckers. Plus, anyone who can’t get off work can still join us downtown as soon as they are able.
There is no agenda, no leaders, no organizing group, nothing to endorse other than we’re not going to pay! Let the bondholders pay, let the banks pay, let those who brought the “toxic” mortgage-backed securities pay!
On this list are many key organizers and activists. We have a huge amount of connections – we all know many other organizations, activists and community groups. We know P.R. folk who can quickly write up and distribute press releases, those who can contact legal observers, media activists who can spread the word, the videographers who can film the event, etc.
Do whatever you can – make and distribute your own flyers, contact all your groups and friends. This crime is without precedence and we can’t be silent! What’s the point of waiting for someone else to organize a protest two months from now, long after the crime has been perpetrated?
We have everything we need to create a large, peaceful, loud demonstration. Millions of others must feel the same way; they just don’t know what to do. Let’s take the lead and make this the start!
AGAIN:
When: 4pm – ? Thursday, September 25.
Where: Southern end of Bowling Green Park, in the plaza area
What to bring: Banners, noisemakers, signs, leaflets, etc.
Why: To say we won’t pay for the Wall Street bailout
Who: Everyone!
Just in time for the collapse of the capitalist economy, the folks in charge are gearing up for fascism. More comprehensive post coming soon, but this stuff is scary [alex]
Originally published by Democracy Now!
Beginning in October, the Army plans to station an active unit inside the United States for the first time to serve as an on-call federal response in times of emergency. The 3rd Infantry Division’s 1st Brigade Combat Team has spent thirty-five of the last sixty months in Iraq, but now the unit is training for domestic operations. The unit will soon be under the day-to-day control of US Army North, the Army service component of Northern Command. The Army Times reports this new mission marks the first time an active unit has been given a dedicated assignment to Northern Command. The paper says the Army unit may be called upon to help with civil unrest and crowd control. The soldiers are learning to use so-called nonlethal weapons designed to subdue unruly or dangerous individuals and crowds.
This latest turn of events signals quite literally the end of capitalism. We in the US are now entering the age of fascism.
More on this story soon. For now, answer me this: what would you do with $700 billion?
[alex]
Democracy Now! covered this today pretty thoroughly. Here’s the audio.
And here’s one article among thousands, this one from wallstreetpit.com
Treasury Sends Congress Unprecedented $700 billion Bailout Plan
By Ron Haruni · September 20, 2008
According to Saturday’s news reports, the federal government is asking Congress for $700 billion to buy up bad debt from U.S. financial institutions in efforts to deal with the ongoing financial crisis.
The plan, part of the government’s largest financial bailout since the 1930s, would give the government broad power to purchase distressed assets of any U.S. financial institutions Read the rest of this entry »
Originally published by Democracy Now!, September 16, 2008.
Stock Markets Plummet as Lehman Brothers & Merrill Lynch Collapse
Stock prices are continuing to fall sharply across the globe today following the collapse of Lehman Brothers and Merrill Lynch, two of the world’s largest investment banks. On Monday, the Dow Jones index fell 504 points. It was the Dow’s sixth-largest point drop ever. The shakeup on Wall Street has seen the 158-year-old investment bank Lehman Brothers declare bankruptcy and the 94-year-old Merrill Lynch being bought by Bank of America in a $44 billion deal. Forbes magazine said the United States is now facing perhaps the worst financial crisis since the banking panic that former President Franklin Roosevelt faced in 1933.
Future Remains Uncertain for Washington Mutual and AIG
Fears are growing that the nation’s largest savings and loan, Washington Mutual, and the nation’s largest insurance company, American International Group, could also go under. On Monday, Washington Mutual had its credit rating cut to junk by Standard and Poor’s. The bank’s stock value has dropped 94 percent over the past year. And the Wall Street Journal reports the Federal Reserve has asked Goldman Sachs and JPMorgan Chase to help make up to $75 billion in loans available to AIG. Stock in AIG plummeted 61 percent on Monday.
“Peak Oil and Energy Imperialism” by John Bellamy Foster in the latest issue of Monthly Review is at the tip of a growing awareness of Peak Oil among Left intellectuals. I’ve been waiting for this for a few years now, and it’s good to see that people are starting to make the connections between oil scarcity and US imperialism.
Foster is pushing a kind of “Green Marxism” – in fact the Monthly Review as a whole is beginning to focus quite a bit on energy and ecology in its critiques of US empire.
The approach is good – peak oil is examined with calm as an inevitable geological event, “alternative” energy sources like tar sands and ethanol are shown in their true nasty colors, and the reader is presented with the option of allowing the government to continue to assault those unfortunate enough to be born on top of oil reserves, or to work for a new humane world.
However, one place this critique falls short is in (explicitly or implicitly) propagating the notion that awareness of Peak Oil by neo-conservatives in the halls of power is what prompted aggression against Afghanistan, Iraq or Venezuela, and labeling this a “new energy imperialism.”
Unfortunately the capitalist system is far more complex and multi-faceted than that, and the neo-cons, like all US elites, are just tools existing to serve the interests of US corporations and the Pentagon, which they are doing quite well by continuing the same old foreign policy of trying to control the oil-rich Middle East (by force if necessary – with the added bonus of trillions of dollars of contracts for the military-industrial complex). If only it were as easy as pinning our problems on the ideas in the heads of those in power, all we’d need to do to end the crisis would be to put someone with better ideas in power! Sorry, it’s not gonna work like that.
The “energy imperialism” we see today as the US gears up for war with Iran is nothing “new” at all; it’s the exact same system that toppled Mossadegh in 1953, that provided tanks, planes and chemical weapons to both sides of the Iran-Iraq war throughout the 80s, and that has been pouring billions of dollars of military aid into Israel to act as regional policeman for 60 years.
The only thing that’s new is that the system is beginning to fail, and the US is having a much harder time maintaining its dominance over the Persian Gulf region, relying on brute force and direct occupation, and even that isn’t working for them anymore.
What we face is not a “new energy imperialism” but an old energy imperialism, newly being beaten. I see peak oil as a major catalyst in the inevitable crumbling of the US empire, and an immense opportunity for all who desire peace, justice or human rights. [alex]
Peak Oil and Energy Imperialism
by John Bellamy Foster
Originally published by Monthly Review. July/August 2008.
The rise in overt militarism and imperialism at the outset of the twenty-first century can plausibly be attributed largely to attempts by the dominant interests of the world economy to gain control over diminishing world oil supplies.1 Beginning in 1998 a series of strategic energy initiatives were launched in national security circles in the United States in response to: (1) the crossing of the 50 percent threshold in U.S. importation of foreign oil; (2) the disappearance of spare world oil production capacity; (3) concentration of an increasing percentage of all remaining conventional oil resources in the Persian Gulf; and (4) looming fears of peak oil.
The response of the vested interests to this world oil supply crisis was to construct what Michael Klare in Blood and Oil has called a global “strategy of maximum extraction.”2 This required that the United States as the hegemonic power, with the backing of the other leading capitalist states, seek to extend its control over world oil reserves with the object of boosting production. Seen in this light, the invasion and occupation of Afghanistan (the geopolitical doorway to Western access to Caspian Sea Basin oil and natural gas) following the 9/11 attacks, the 2003 invasion of Iraq, the rapid expansion of U.S. military activities in the Gulf of Guinea in Africa (where Washington sees itself as in competition with Beijing), and the increased threats now directed at Iran and Venezuela—all signal the rise of a dangerous new era of energy imperialism. Read the rest of this entry »
I’m reposting this article not because I agree with everything said in it (just feel like I need to start pointing that out so people don’t get confused), but because I think it should spark some good ideas and maybe discussion.
Sale is hitting here on some fundamental ways of seeing the actions of the current U.S. government – that they are desperate to cling to an existing imperial power structure that is deteriorating rapidly – which should help us as anti-imperialists to formulate an appropriate strategy for 1) speeding up that dismantling process so that less damage is done to us and people all over the world, as well as the planet, and 2) figuring out what should replace this system (democracy, freedom, justice, sustainability…) and how we can best usher that new world into being. [-alex]
Collapse of the American Empire
by Kirkpatrick Sale (author of SDS)
Originally published in Counterpunch, February 22, 2005.
It is quite ironic: only a decade or so after the idea of the United States as an imperial power came to be accepted by both right and left, and people were actually able to talk openly about an American empire, it is showing multiple signs of its inability to continue. And indeed it is now possible to contemplate, and openly speculate about, its collapse. Read the rest of this entry »
World Economy Would Collapse If Oil Hit $200, Deutsche Says
By Shigeru Sato and Yuji Okada
June 25 (Bloomberg) — The global economy would collapse if oil hit $200 a barrel, said the top energy analyst at Germany’s largest bank.
“Two-hundred dollar oil would break the back of the global economy,” Deutsche Bank AG’s Chief Energy Economist Adam Sieminski said in an interview today in Tokyo. “Next step after $200 would be global recession and bad news for everybody.”
Sieminski’s comments come after Goldman Sachs Group Inc. forecast oil may rise to between $150 and $200 within two years as supply growth, especially from producers outside the Organization of Petroleum Exporting Countries, fails to keep pace with demand. Deutsche Bank is due to release its oil-price forecast on June 27.
Oil doubled in the past year, touching a record $139.89 a barrel on June 16. Read the rest of this entry »
Excerpts from Democracy Now!, May 6, 2008.
[Kevin Phillips, author of "Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism", surveys the economic crisis facing U.S.-dominated global capitalism - including peak oil, the collapse of the Dollar, rising food costs, and the growing dominance of the banking and credit industries. This is fairly radical stuff coming from a former GOP strategist.]
AMY GOODMAN: What do you think is one of the most serious signs of this overall global crisis of American capitalism?
KEVIN PHILLIPS: Well, not to single out just one, I have an approach I use to say that normally when a country is—United States is—heading into a recession, there are one or two, sometimes three, factors that you worry about. But at this point in time, the American economy, you can think of it as being kind of in a shark tank, and there are like six or seven sharks, and you don’t usually see anything like that number. Read the rest of this entry »
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