It could have been worse.
The Large Thing in the Living Room: It is becoming more and more clear that Bernanke really doesn't know how to safely withdraw all that excess funding from the system before it turns into the Man that Came to Dinner. But no matter what happens, it will not be his fault. Nothing is.He says he can fix it, but not everyone is convinced.
Petroleum Lab: Mexico, the current laboratory experiment on the (obvious) validity of the Export Land Model, reduced its oil production by 7.6% in 2009, and its petroleum exports by 14.4%. Its exports are now half their 2004 level. Similarly, Venezuela's production was down 5.3% and exports down 9.2%, and Saudi Arabia's production was down 8.7% and their exports down 12.3%.
Election Distortions: Even with the deficit already at $1.5 trillion and growing, do not expect prudence from Washington. It is an election year; and when Obama turns on the spending for the election, the deficit will easily surpass $2 trillion. At that level foreign buyers will balk and the bond market spasm until interest rates go much higher and the dollar much lower. Gold and silver will reach records, and oil will be well on its way by year's end.
The Venus Trap: Here's the real problem: Oil is the perfect fuel, except for its “environmental externalities.” It is liquid, portable, energy dense, inexpensive and profitable. All of which help explain why we will burn all the oil, all the tar sands and all the oil shale – pretending that they are needed so we can achieve a greener, more sustainable energy platform. In doing so, we will condemn the Earth to runaway global warming.
Setting the Stage: I was not privileged to participate in the decisions that led to Vietnam, Panama, Yugoslavia, Afghanistan, or Iraq, and now Yemen, but my suspicions are that greed, arrogance, ignorance and insecurity – in approximately equal measure – were the prime ingredients. How else to explain our continuing creation of new enemies?
Playoffs: Standings, after starting on 1/1/2000 with $10,000. Venture capital funds, $8,800. S&P 500, $9,090. Raw materials, $13,803. 10-year Treasuries, $18,000. and Gold, $37,852. Real Estate was disqualified.
PT Barnum: The government will use the current paranoia to fan our fears and impose ever greater controls on the population. Never mind that the crotch bomber – like his Nike burning predecessor – is pretty much a dupe and could have been set up by anyone from al-Qaeda to the CIA (and don't overlook the Israelis), we want to be safe, now. Sit there quietly, ankles and knees together, hands fully extended, palms up.
The Firm Grasp: The world's future technological progress depends upon the rare earth minerals, 97% of which are rather awkwardly tucked away in Chinese mines. China is insisting that ever greater portions of rare earth sales be as finished products, not raw materials. And they've got the upper hand.
Emptied Words: Audacity, Hope, Change We Can Believe In, Rule of Law, Accountability, Freedom From Lobbyists, Privacy, Harm From Illegal Surveillance, Constitutional, Transparency, Predatory Business Practices, Closing Guantanamo, Reform, Withdrawal.
Year of the Dragging: Here's the big news – China doesn't play fair and has stolen about 1.5 million US jobs. Glad someone finally noticed. If only someone in the government could face the fact that it might be better to keep some jobs here and not to keep borrowing from the competition.
Ringing the Bell: The IPCC's predictions were scary enough, but since 2007 global climate change has progressed faster than the worst-case scenario suggested. How can this be when nations report positively on their efforts to curtail carbon outputs? They lie.