Uncle Sam's Woes

<Problem Background    <Inferences<


For readers in the USA a good taste of what you folk unilaterally have odds on chance of living through there is Matt Savinar's website Life After the Oil Crash  with extracts from his  book "The Oil Age is Over: What to Expect as the World Runs Out of Cheap Oil, 2005-2050" . As the 5% of the world's population that is the USA, currently consume 25% of the whole world's oil production, obviously dwindling supplies will bite there hardest.  Another  website is Richard Heinberg's  MuseLetter, he has also authored one of the classic books on all this  "The Party's Over: Oil, War, and The Fate of Industrial Societies".  In order to see how murky Uncle Sam's predicament is,  there are a couple of other ingredients to go into the pot yet.

 Currently the USA spends four dollars for every greenback it earns from trade. At the end of 2003 the USA has a negative net worth of about $13 trillion.  The gigantic foreign account debt is not only an issue of Bush's ballooning budget deficit, but actions of all levels of the society like voters that gave Arnold Schwarzenegger the power to write  junk-bonds for financing of California, or the stock-holders backing companies' reckless borrowing then takeover strategies, or even the mom's & pop's credit-card addictions. Some have described it as the 1920s revisited before the Wall Street crash.     




Lastly a not insignificant factor in the Greenbacks temporary violation of fiscal gravity (check-out The Globe&Mail's "ugly scenario" ),   is the demand for Greenbacks as the currency that many international markets were denominated in (such was the oil trade). As the Euro has established itself as markedly more fiscally responsible currency than the Greenback, many exporters are now writing more contracts in Euros. Thus Saddam Hussein's move to write Iraq Oil contracts in Euros being a motivation for the USA invasion of Iraq! "There have even been discussions among Arab nations about pricing oil in Islamic gold and silver dinars. ..........., sending the [U.S] dollar into a freefall while demand for euros, gold and silver soars".

The obscure logic that was President Bush's foreign policy is very well explained in Kurt Cobb's Resource Insight's article "Global resource wars: The Rosetta Stone", where 'Oil' is the lens of enlighten rather than the Whitehouse's myriad of contradictory fanciful spin, aped nightly by a comatosed media.

From here there are a bunch of different scenarios for the next fifty years for the USA.  Before getting into the scenarios it is worth remembering that it was only four years from 1985 when Mikhail Gorbachev heralded a new style of liberalization in the Soviet leadership, to the break-up of the Soviet Union during 1989-90 and the fall of communist dictatorship across Eastern Europe.  The demise of the USSR as a world superpower should be a sobering lesson for USA as it could also fade just as fast. Dmitry Orlov (with his firsthand experience of the living through the Russian experience) does a talk "Closing the Collapse Gap" (for audience in the USA) where he darkly concludes;-

     "I hope that I didn't make it sound as if the Soviet collapse was a walk in the park, because it was really quite awful in many ways. The point that I do want to stress is that when this [the U.S.A.'s] economy collapses, it is bound to be much worse. Another point I would like to stress is that collapse here [USA] is likely to be permanent. The factors that allowed Russia and the other former Soviet republics to recover are not present here [in the USA]. "

Will the hurricaneKatrina mark the beginning of a quick-end for the once great USA??

Ordered from the least to the most uncomfortable they run thus:-

  1. A Miracle:
    That somewhere in the years of diligent oil exploration there is a colossal error hiding massive oil fields in a totally different corner of the world.  Cheap oil fields in a temperate climate and a sparsely populated politically benign country. Oil fields that are larger than all the middle-East fields put together.  I think not.
  2. Visionary  Enlightenment:
    Feeling real down in the G.W.Bush years I judged this option as "Not very likely!" Now with Barack Obama as the new President of the USA, he at first offered the promise that he may yet be enlightened enough to understand all the science and issues involved with Climate Change and Peak Oil. But then he came to the hard bit, to inspire first the rest of Government (not just his own party) to ratify Kyoto Protocol, introduce a substantial Carbon Tax. While more environmentally aware than "Dumb & Dumber" Mr Bush monkeys that preceded him, Obama has failed the ethical challenge of the Kyoto Protocol, US threatens to derail climate talks by refusing to include Kyoto targets Then inspire the whole nation to pour funds and effort into public transportation and alternative energy research & development. We will just have to wait and see, if and how Barack Obama manages first with the Credit Crisis.
  3. Courageous Response: 
    After some external crisis;-  like the overthrow of the Saudi government by al-Qaeda, or a bout of disastrous climate change weather (such as in the film "The Day After"),  the
    President galvanizes the country to make painful immediate sacrifice pulling together for the common good. Thus enamoured a hurried-up version of the "Visionary  Enlightenment"  scenario (see above) is dived into with spades of Can-Do enthusiasm.
     Still Long-odds it didn't with the Bush White House
  4. The Long Brown-out:
    Least uncomfortable and as I write the best outcome likely for a second Bush term in the White House.  As Greenspan hinted the USA economy will first stagnates as the price of oil stays high for any length of time. While the USA is fortunate to escape  any seriously bad weather or other shocks spooking the Futures & Stock Markets. So much so that  "The Death of the Dollar" is now a common theme in the financial press.  This scenario would then be a re-run of Japan's recent economic history with a Slowly Deflating economy as the USA is eclipsed by China alone, or South & East Asia combined with a resurgent Europe & Russia.
  5. Super-Sized Crash:
    Also a strong possibility after being lulled by a few more years of relative cheap oil with  compounding lost opportunity. A heat-wave summer is followed by really bad winter, energy supplies haemorrhages under the stress while the good people freeze in their homes.  The New York Stock Exchange Crashes "further still" and the country gets to appreciate the  super-sized versions of the depression (even more plausible now, what since the Credit Crisis blossomed!).  But because of the growth of other economies in the world this time round the depression is fairly much quarantined to the USA. William Catton's article
    "Industrialization: Prelude to Collapse" (an excerpt from his book "Overshoot: The Ecological Basis of Revolutionary Change")  does an insightful analysis from an ecological viewpoint of the Great Depression and the next inevitable crash. In the end then a large chunk of the USA is sold off to the highest bidder, to become lets say a Saudi client state.
  6. Perpetual War to Grab the Last of the World's Resources.
     Given performance todate {as mentioned above see  "Global resource wars: The Rosetta Stone"} this is the odds-on bet for the rest of the Bush White House's second term. This possible future is often called 'Plan A', or what Robert Freeman sketches as the 'Grab the Oil strategy' (along with other insightful scenarios in his mix)  in the article  "Will The End of Oil Mean The End of America?". John Stanton develops this idea further in his imaginary future history "Overview: The Great Energy War:US & Allies Neutralized, World War III Ends "
  7. Denial to Hyper-Inflation:
    Denial seems to be cornerstone of the USA's psyche or as a Canadian has put it "American Born, addicted to Happiness".  Since the G.W.Bush elections there is also the insane idea that things like the environment or resource depletion are "unimportant in light of the imminent return of Jesus Christ". So the nightmare scenario is that rather than a long brownout or spectacular crash,  delusional "nothing is wrong" sentiment propels the Greenback into manic hyper-inflation.   .The resulting environmental & economic shock-waves engender massive social dislocations that tear the fabric of society and the nation asunder.  Civil unrest becomes civil war with nuclear weapons. The scraps left after the conflagration remain as a Balkanized hot-potch of petty dictatorships, while the more lucky states sharing borders with peaceful stable neighbours are annexed by Canada and Mexico.



  1.  Also it is worth checking-out the USA website CommonDreams that republishes lots of top-draw (from wide & varied sources) articles about where the world. seems to be stumbling at the moment.  Two articles in particuliar;-
  2. "Apocalypse Soon: The Risk of inadvertent nuclear launch is unacceptably high"   by Robert S. McNamara (USA's Secretary of Defense during the Kennedy administration),
  3. "Chernobyl Can Happen Here" (i.e. in the USA) by Linda and Paul Gunter




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Last update: February 2009 Southern Summer
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