A Dangerous Economic Cycle

A Dangerous Economic Cycle

Does anybody remember how bad it was BEFORE the present economic collapse?

The World Economy had been so overheated that commodities prices were shooting above the range of a great many people to even be able to afford ordinary food. With Wars raging in the World’s Oil Zones, and with new demands for Oil coming from the growing Economies of India and China, it was understandable that Petroleum prices would sky-rocket. But then it was learned that grains and other foodstuffs could be boiled down and fomented into Bio-fuels, effectively linking Oil Prices to Food Prices, which would henceforth until forever rise or fall in tandem.

Some experts had projected that if Oil hit just $200 (and it had gotten as high as $150) a barrel, then over half of the World Population would be priced out of being able to eat a bare 800 calories a day. Combined with petrol-driven soaring transportation costs, some depressed areas of the Globe would not even see Relief Supplies – too expensive to buy and too expensive to deliver. Starvation would be massive.

The Financial Crisis rescued us from these hyper-inflating commodities prices, but at the cost of the loss of millions of jobs. With the collapse of production and employment commodities again became affordable, for those who still had jobs…Or the Capitalists who still had plenty of leisure savings.

We hear very little anymore about how the one crisis had sparked the other – how the Financial Crisis followed causally from the Commodities Crunch. With the upwardly spiraling food and energy costs, a lot of people could no longer afford to pay their mortgages… not with also being able to drive to work and eat food. People were driven to impossible choices. And for many people, paying off the Banks was not their top priority. Eating food or heating their homes was… while they still had homes.

So the Banks fell. Western Capitalism collapsed. The People of the World took on a crippling debt so that Capitalists could write themselves huge bonus checks and go back to business as usual. And it could all happen again tomorrow, albeit with so far fewer resources than we had the first time.

Now, the News Media, so concentrated in the hands of one or two of the World’s wealthiest Capitalists, is entirely behind Capitalism and never fails to present an optimistic view to our Future. We are told the World Economy is in the process of Recovery. But Recovery from what?

As soon as the Production and Employment picture improves, the commodity prices will begin to soar again. Millions of people still need to drive a great distance to work. These people still need to eat food. A lot of these same people have adjustable mortgages, so as soon as the Economies reach some real level of Recovery, then the adjustable Interest Rates will go up at the same time as fuel and food prices. The World Bankers automatically raise interest rates to suppress Inflationary trends. Recovery will inevitably trigger its own Recession. The Financial Crisis will simply repeat. It’s Cyclic! As long as none of the Variables are changed… as long as the basic factors remain in place, then we will all effectively be Damned if we Do and Damned if we Don’t.