Friday, March 11, 2011

Walking out of Michigan

Back in 2011 the Republicans in Michigan pushed through new laws that allowed them begin doing away with local government simply by declaring a crisis and replacing government with corporate managers. After the Democrats were completely swept from the stage in 2012 this dogma became the law of the land. And life was good, if you could pay for it.

For many, paying for the essentials of life rapidly became impossible and scavenging became the new normal. Copper became the new currency of trade until it was gone. Having heat required scavenging wood to burn and this often ended in tragedy but it had become a world of tragedy. Corporations needed fewer and fewer workers except for security which became ever more brutal.

Manufactured goods that supported the rich and the security state were all imported and the entire production of the land was needed to be exported to pay for it. Much like Ireland in 1840. That production became ever less as crops failed and the oil that made corporate agriculture happen became impossible to import.  Things like medicine were only for the rich and finding enough food became increasingly difficult. Then the food stopped coming all together.

Enough people walking inside a narrow stretch of ground will wear a trail into the earth in a surprisingly short period of time. People who don’t know where they are going will instinctively follow the person in front of them and the trail gets worn deep. Sometimes the walking was done on pavement where the walkers applied a certain kind of “patina” to the surface, a mixture of everything that people leave behind. Blood, vomit, urine, all the products of the sick and dying.

Here and there were the items struggling people drop, all manner of personal things, suitcases, clothes, blankets, rags. Here and there a bicycle, a baby buggy even wheelbarrows that had carried love ones who couldn’t walk when they started. All lay abandoned, particularly on the steep hills and scattered off to the side were the bones.

Because you see, at night an incredible number of stray dogs would come out to scavenge for food. As people lost the will to scare them away they started coming to the trail in daylight. Their only competition were the crows that the dogs would chase off the abandoned bodies, after a particularly cold night the crows didn’t need to share. Not everybody was completely dead when set upon by the dogs.

The trail didn’t always take the most direct route and leaving the trail near any corporate worksite or an intact town could also be fatal as newcomers weren’t welcome. For most of these towns it was only a matter of time before they also took to the trail.

Where did the trail end? It didn’t have an end.  It was like a river flowing into the desert. The trail was one of many, they would ebb and flow and merge together like storm runoff but none of them really went anywhere. America simply evaporated.

Thursday, March 10, 2011

Giant beanstalk futures are a strong buy!

The Dow dropped almost 2% today closing below 12,000, traders were spooked by unexpected economic news from around the world. China posted a 7.5 billion trade deficit in February which was their first in six years. Chinese officials blamed the Lunar New Year holiday for delaying shipments but acknowledged that their trade surplus would be smaller this year.

But, this may just be China posturing ahead of the G-20 currency meeting to be held in Beijing at the end of March where the under valued Yuan will be the big issue. The US trade deficit on the other hand is exploding with oil imports leading the surge.

Wall Street is also jittery over the Euro-zone debt or specifically the specter of European bonds falling through the floor. Moody’s (the same people who rated sub-prime loans as AAA investments) have downgraded Spain’s debt and unlike Greece or Ireland, Spain is a fairly large segment of Europe’s economy. This is driving down the Euro against the USD but the hedge funds had been betting record amounts against the USD and these two opposing views are translating into market instability.

None of this nonsense should affect the real world but unfortunately Reagan set us on a course of trading the cow for magic beans. The state pension funds are in trouble because they invested heavily in Wall Street’s magic beans. There is no reason states should be putting any money into Wall Street. They invest in Wall Street on one hand and borrow from Wall Street on the other hand to build public projects. Why do millionaires need to take a cut on both ends of this from the public coffers?  Can you say Kelptocracy?

Speaking of the real economy, Initial Unemployment Claims are up again and approaching 400,000 last week indicating the job market is not recovering. At the very least it indicates falling wages, if not the actual loss of jobs. The experts have been saying fuel prices have not risen enough to really hurt the economy. The experts were predicting jobless claims would fall. The experts are also recommending giant beanstalk futures.

Monday, March 7, 2011

Just accept that you are broke while they have it all

Hedge funds and foreign currency exchange traders are betting record amounts against the USD. If you were worried about $5.00 gasoline, don’t bother, worry about having anything to eat. Of course it could be just a tempest in a tea pot in order make a few billion for the big money people. Make no mistake, this is a manmade crisis, but every time they do this scam they run the risk of it getting completely out of hand.

If you happen to bear the brunt of one of these little forays into free market capitalism the starvation is very real. Already one in five Americans qualifies for food stamps and the system is not that generous, many more are having a hard time with real food security let alone any have any realistic hope of achieving the American Dream.

There are 400 million gallons of gasoline used in the US on a daily basis. Just a 50 cent hike in price translates into 200 million USD per day consumer “tax” that is paid to the rich just as if they were feudal lords. You won’t see any tea baggers protesting this “tax“, they are funded by the Koch brothers who get a big chunk of the proceeds.

If these billions aren’t enough, the Wall Street banks have another scam to play off of this “crisis”. They sell derivatives, a derivative amounts to a short term insurance policy against price swings. They sell them to companies at risk from prices going up for all manner of things that are bought and sold, not just fuel. They also cover the risk of buying at current prices and being stuck when the market collapses. Pension funds buy them to try to protect themselves which comes out of your retirement. The big money is selling them to hedge funds that are just placing bets.

It’s sort of like setting the town on fire and then selling insurance, but not just to the people at risk of losing their homes but selling them to people in the next town who are betting that somebody else’s house will burn. This is what brought down the world economy in 2008 and not mortgaging too many houses for brown people. This bubble is conceivably bigger than the 2008 bubble since the same players are still at it (thanks to 14 trillion in bailouts) and they are even bigger than when they were declared “too big to fail” by the Bush Adm.

The cost of buying “protection” is passed along to the consumer in higher prices besides the actual rise in energy costs. That is if your company can do that, some can’t as they are already being pinched by the weak economy and that will only get worse as this crisis deepens. More failed businesses, more jobs lost, this makes things worse for other companies as consumers lose jobs or have their pay cut (there’s a crisis, don’t you know). This is how you get a economic death spiral going and the Republicans who are trying to break the unions, cut the safety nets and drive down wages know full well.

The one thing you must remember is that this “crisis” is not real but they are trying to make it real. America is not broke like the rich keep saying, they just want you to accept you are broke while they have it all.