Showing posts with label Economic Crisis. Show all posts
Showing posts with label Economic Crisis. Show all posts

Monday, 12 October 2009

Shock and Poor

Gordon Brown’s announcement today that he will be trying to sell off £16bn worth of government-owned assets is another worrying sign of the people in power using the current economic crisis to push through any old policy that they want, all in the name of saving our economy.

Echoing the MO illustrated so thoroughly in Naomi Klein’s excellent book, The Shock Doctrine, the chaos of last year’s banks and business collapse has already seen the mass plundering of the welfare state by our governments in order to needlessly bail-out the rich.  Now, with the public’s coffers completely depleted through the expense of all these bailouts (and the continuing funding of two seemingly never-ending wars in Iraq and Afghanistan) we are seeing phase two of disaster capitalism at work: the manufactured claim that the welfare state – no longer financially solvent – cannot, therefore, be afforded.

The money isn’t there, we are told. 

The country is in terrible debt. 

Things will have to change.

But instead of raising the taxes of the rich business-owners and bonus-claiming bankers who created this economic mess in the first place, and who have benefitted tremendously from the daylight-robbery of the bailouts, we are told that the only solution to our financial problems is to make cuts in public spending for the poor; to enact drastic pay freezes for public sector workers; to enforce cost-cutting redundancies all across the workforce; and now, to sell off yet more of the public’s collective assets to private businesses so that they can use them for private profit.

These are not the only solutions, but the sheer shock of the the scale of economic disaster – or at least the perception of such a disaster, as was sold to us in the press – has made us vulnerable and bewildered.  In the wake of all this trauma, we’re too stunned and confused to question the policies are leaders continue to insist are “good” for us, or “vital” for economic recovery, but by the time we wake up from the numbness of our stupor, it will already be too late and the theft will be complete.

Our benefits axed, our assets sold, our pensions stripped and our jobs lost forever; we will finally come to our senses and find that, in its sleep, the country has been robbed.

Tuesday, 6 October 2009

The Next Sub-Prime Collapse…

Robert Fisk reports in today’s Independent, that Gulf Arabs, China, Russia, Japan and France plan to end dealing in dollars for oil.

The demise of the dollar - Robert Fisk, The Independent

There are many who have argued that it was Saddam Hussein’s decision to start trading oil in Euros, rather than dollars, that was a key factor in the decision to invade Iraq, and the US have long been opposed to any change in this current trading system because, without the world needing US dollars in order to buy and sell their oil, the United States’ role as economic superpower could be severely undermined.

Without the need for US dollars on the international oil market, central banks across the world will want to replace their stock of US dollars with the new oil-buying currency instead. When the banks stop buying dollars, then the value of the dollar will fall. When the banks get rid of the dollars that they have, and flood the international money markets with the now unwanted and unusable currency, the value of the dollar will plummet.

If you have ever wondered how a country as rich as America can still be in over a trillion dollars of debt, and yet maintain their appearance of affluence, it is because their unsustainable economy has been propped up for years by loans from countries eager to receive pay back in oil-friendly, US dollars.

Can you imagine what happens to that debt, however, when the dollar becomes unfit for purpose?

This might just be the most important news story of the next nine years…

UPDATE: 8/10/09: http://www.guardian.co.uk/business/2009/oct/08/gold-breaks-record-weak-dollar

Monday, 5 October 2009

The Economic Crisis is Over…For the Banks

 

Another depressingly true column from the always insightful Dean Baker…whilst the people continue to suffer, the banks go from strength to strength!

| Dean Baker | Comment is free | guardian.co.uk