Wall Street markets were up today and everybody is feeling bullish. The Federal Reserve printing a fresh trillion has gotten things going. Commodities are up and the sky is the limit so money is pouring in from your pension and 401k managers. Wave goodbye to it, you‘ll never see it again.
Nothing about this market bubble is building the real economy of course but they will take credit for the natural up tick that you can expect after a recession has run this long. The improvements we are seeing will quickly evaporate as commodity prices rise. There is a pretty good chance we’ll see $4.00 gas soon and if the economy can handle it, you’ll see $5.00 gas.
And no, it’s not peak oil, that is not going to happen overnight. There is still plenty of oil and the market should reflect that, this is Wall Street manipulation. Keep in mind that the big oil companies don’t pay “market” price for oil anyway, they have plenty of their own that they got cheap. If you think the high price of gas is good for the planet, guess again. Tanking the economy only makes it harder to get off fossil fuels.
Expect food prices to far exceed the last bubble when millions died as food became priced out of reach. There will be massive rioting in countries where people pay half their income for food already. The further out of reach food becomes the more the price goes up in a bubble economy as money making opportunities abound. This also drives down supply as it becomes difficult for third world farmers to afford to put in a crop. Less local supply of course drives the price up even higher and this means there is even more money to make.
You can expect this bubble to grow fast and end quickly, almost certainly by September 2012. A 1500 point Dow should guarantee a Republican sweep when combined with unlimited corporate spending thanks to the five Republicans on the Supreme Court. There is talk of impeachment as several of Justices haven’t been reporting millions of income from rightwing sources on their disclosure forms over the years. But Obama likes to move forward and such crimes are by definition in the past so don’t expect anything to happen.
The buzzword for Obama is now economic “competitiveness“, this has long been rightwing code for union busting, maybe he is just using it as slogan and thinks he can ride the bubble through the election. There is simply no way to “compete” with India, China, Brazil, Vietnam and on down the list. The idea of protecting our domestic economy like all the successful countries do is not even spoken of, except to wrongly blame the Great Depression and even the current one on such “protectionism”. The history from 1790 to 1980 seems to not exist anymore, it’s all gone down the memory hole. The American Dream is going down right behind it. www.prairie2.com