Year 9-2
We all have seen these tremendously long trains stacked with doubled up containers, most of them originating in China. That sort of transport may soon stop. It’s the money matter that may halt this.
The growing financial crisis is hampering world trade as shippers also of dry-bulk goods such as grain and coal, worry that importers won’t be able to pay for the goods they receive. This may result in food and energy shortages next year. Because of this sudden curtailment in cargo transport, rates for the biggest dry-bulk ships have plunged to an average of just $5,611 per day, compared with $166,377 a year ago. No wonder ship owners are laying up their ships rather than operate at a loss, adding to the international trade troubles.
There are still Three Auto Dinosaurs out there who will go the same way as their pre-historic namesakes who expired when their ferocious appetite could no longer be satisfied: they simply starved to death. The so-called Big Three are following a similar path as the fuel their pre-historic machines require is disappearing. The employment loss there and millions others related to it – one in 5 jobs is connected to the CAR in one way or another- will mean the death of the great American Dream with disastrous consequences especially for such cities as Detroit, Lansing, Windsor and Oshawa.
Food could well be next on the misery menu. As farmers have trouble getting bank credit for fertilizer, seed, fuel and more, the net effect will be lower planting of key grains even as world inventories of these cereals hover near historic lows. Bloomberg reports that global stocks of corn, wheat and soybeans are the second lowest they’ve ever been since 1974. Already the bank crisis threatens next year’s crop in Russia, where the head of the Russian Grain Union says, ‘Many farmers probably won’t be able to borrow money for the spring sowing.’ Russia happens to produce 9% of the world’s wheat, and that in a world where the five-year average growth rate in grain demand is 2.6% per year.
It seems to me that the global economy as we know it is finished. The meeting of the G20 in Washington did nothing to solve the problem caused by the tsunami of borrowed money. The naked reality is that the world’s buyers of last resort, the American Consumers, are suffering from a severe debt hangover that will keep them hung-up for a long time, perhaps permanently. The American “consumers”, having gorged themselves on the output of Asian factories in exchange for paper promises, have gone on a permanent shopping strike, which will foster a financial typhoon in China, where its restive population, both broke and hungry, might start another revolution. After all, that’s how the Commies there got into power.
In short: the “Real Estate Economy” is reeling; the “Financial Economy” is faltering; the “Consumer Economy” is crashing; and the “Service Economy” is disappearing. Now that the tentacles of the Credit Crisis have ensnared every sector of the world’s markets, a Global Depression Economy is unavoidable.
Welcome to a new world in need of new thinking. Think the US – wanting our oil and water – occupying Canada. Think war-time conditions. Think rationing. Think frugality. Think barter. Think making meals from home-grown food. Think thinking out of the box, as the improbable and even the impossible become the imperative.
Actually bad times can be good for us. We’ll have more time for reading newspapers and books, more time for exercise, more time for family life, more time to implement the 100 feet diet, eating from our own garden, more time to talk to, and help others.
Wartime in Europe actually improved health and mortality rates. Less economic activity gives cleaner air and force people to work closer to home and in the home. Manufacturing of the future may be more like a cottage industry, bringing to mind the title of Schumacher’s book of the 1960”s, “Small is Beautiful.” Neighborhood stores will see a revival. Local retail (and its support structures) will return.
Bush, last week, made a pitch for market Capitalism. He has been wrong so often, that now nobody pays any attention to him anymore.
Will Obama be better? He will preside over the potential restructuring of all our systems, some of them in ways he and his supporters have not even imagined, with central powers waning, and local autonomy on the rise, as each region will strive for self-sufficiency.
Welcome to a new world. Of course we leave the old world reluctantly, as a new world is forced upon us swiftly and radically with the collapse of our money economy. What we leave behind has been part of ourselves. It’s painful to be forced to die to one life, before we can enter another. Yet this experience is essentially a fortunate one, because we can be ourselves again, no longer forced to conform to a model imposed upon us by The Consumer Society that literally is threatening to consume everything including ourselves.