This article was inspired by Jim Puplava’s “Petro Business Cycle“. A fantastic read. There were a few charts in there that I wanted to emphasize. In doing so I wanted wanted to provide a slightly different focus and really underscore three facts:
- We’ve never recovered from an economic downturn when oil prices were high
- BRICs will now provide permanent pressure points on [oil] consumption levels—thus prices will remain elevated, therefore we can forget about recovery
- Psychopaths take truly awful economic carcinogens (subprime mortgages, derivatives, Globalization) and use a form of economic-genetic-recombination to infuse economically insane toxins into our economy for own personal profit.
Globalization’s Terminal Phase
The timing could not be worse. Our collective economic immune system is shot, thanks to our insane 130 plus trillion dollars worth of debt, and the ever diminishing purchasing power of “our” dollar.
None of our audacious geniuses, the ones who still consider themselves to be economists—even after missing both the dot Com Bubble and Housing Bubble—have picked up on this. They miss the really big stuff, the economic obvious, because of “Economic Scholarly Capture” (link) and “Mainstream Media Economic Capture” (link). Both are like a pair of human blinders. These captures have caused them to fall prey to the false economic belief that high prices and inflation are one in the same.
They’re not!
High prices are three things and three things only:
- A symptom of a devalued currency.
- A symptom of high oil prices. Oil is the DNA of everything. As Puplava points out in his “Petro Business Cycle” article: ‘Ninety percent of our transportation fleet is powered by it, 95% of our food products rely on it. Oil is used in everything from Deodorant, pantyhose, pillows, hair coloring’… I’d add to that: Not counting transportation it takes 10 calories of oil to yield 1 calorie of food.
- A symptom of increased demand and inadequate supply, of which we have too much demand for oil and too little supply of it. Oil being an integral part of all goods and services seriously skews Supply & Demand’s Price Equilibrium.
Băstərd Economic Architecture:
Nothing is more destructive than băstərd architecture. Take the Fukushima Nuclear Power Plant’s Mark I reactor with its pathetically inadequately designed containment system erected it upon a foundation of 14 major fault lines.
We have our own psychopaths who specialize in Băstərd Economic Architecture. They made the Fukushima engineers look intelligent by comparison.
Globalization was nothing more than CEO’s realizing that their job and pay was directly tied to their stock’s performance, not corporate profits. Exploiting cheap labor was a get rich quick scheme.
Additionally the 535 Ás klouns on the hill were making it impossible for businesses to conduct business within the states. High taxes, insane regulations, lack of well educated labor (our schools suck, we’re 17th in reading, 23rd in science and 31st in math), easier foreign government investment and a more favorable business climate, Unions didn’t help. Apple has a factory in China with 300,000 employees that requires 30,000 “engineers”. Not PhD engineers—just people trained in a trade school. Jobs said the US doesn’t have that many engineers.
