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Countdown to a Meltdown-- The Atlantic Monthly
The Atlantic Monthly ^ | July/August 2005 | by James Fallows

Posted on 07/21/2005 6:11:32 AM PDT by dennisw

America's coming economic crisis. A look back from the election of 2016

***EXCERPT***

Or perhaps we should call it the first domino to fall, because what then happened had a kind of geometric inevitability. The next domino was a thousand miles across the Caribbean, in Venezuela. Hugo Chavez, originally elected as a crusading left-winger, was by then well into his role as an outright military dictator. For years our diplomats had grumbled that Chavez was "Castro with oil," but after the real Castro's death the comparison had new meaning. A right-wing militia of disgruntled Venezuelans, emboldened by the news that Castro was gone, attempted a coup at the beginning of 2009, shortly after the U.S. elections. Chavez captured the ringleaders, worked them over, and then broadcast their possibly false "confession" that they had been sponsored by the CIA. That led to Chavez's "declaration of economic war" against the United States, which in practice meant temporarily closing the gigantic Amuay refinery, the source of one eighth of all the gasoline used on American roads­and reopening it two months later with a pledge to send no products to American ports.

That was when the fourth­and worst­world oil shock started.15 For at least five years economists and oilmen alike had warned that there was no "give" in the world oil market. In the early 2000s China's consumption was growing five times as fast as America's­and America was no slouch. (The main difference was that China, like India, was importing oil mainly for its factories, whereas the United States was doing so mainly for its big cars.16) Even a temporary disruption in the flow could cause major dislocations.

All the earlier oil shocks had meant short-term disruptions in supply (that's why they were "shocks"), but this time the long term was also in question. Geologists had argued about "peaking" predictions for years, but the concept was on everyone's lips by 2009.17

The Democrats had spent George Bush's second term preparing for everything except what was about to hit them. Our forty-fourth president seemed actually to welcome being universally known as "the Preacher," a nickname like "Ike" or "Honest Abe." It was a sign of how much emphasis he'd put on earnestly talking about faith, family, and firearms to voters in the heartland, in his effort to help the Democrats close the "values gap." But he had no idea what to do (to be fair, the man he beat, "the Veep," would not have known either) when the spot price of oil rose by 40 percent in the week after the Chavez declaration­and then everything else went wrong.

Anyone who needed further proof that God is a Republican would have found it in 2009. When the price of oil went up, the run on the dollar began. "Fixed exchange rates with heavy intervention­in essence, Bretton Woods Two] have enormous capacity to create an illusory sense of stability that could be shattered very quickly,"


TOPICS: Business/Economy; Culture/Society; Editorial
KEYWORDS: doomed; doomeddoomeddoomed; goldbuggery; goldgoldgold; goldmineshaft; itsallbushsfault; looneychickenlittle; skyisfalling
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1 posted on 07/21/2005 6:11:33 AM PDT by dennisw
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To: dennisw
The complete doomsday scenario, the complete article, can be found at:

http://www.forestcouncil.org/tims_picks/view.php?id=1121

http://groups-beta.google.com/group/alt.politics.immigration/browse_thread/thread/637bf3edfe58fdd5/a8bc74b3f2858c04?hl=en#a8bc74b3f2858c04

 

2 posted on 07/21/2005 6:13:43 AM PDT by dennisw ( G_d - Against Amelek for all generations)
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To: dennisw

What is Fallows talking about?? An asteroid hit the Earth in 2010 and there never was an election in 2016. We were all dead by then. Get it right, man!


3 posted on 07/21/2005 6:16:46 AM PDT by ClearCase_guy
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To: ClearCase_guy

Geeze, what an idiot. In 2016 the US and China are in the middle of a nuclear war. Moron.


4 posted on 07/21/2005 6:20:46 AM PDT by Pondman88
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To: dennisw
There seems to be no end of ignorant idiots on FR and in the larger world of New and Old Media who know absolutely nothing about economics, yet who are simultaneously willing to not only analyze but to predict major macroeconomic developments.

It's like watching toddlers try to rebuild a transmission.

5 posted on 07/21/2005 6:24:06 AM PDT by wideawake (God bless our brave troops and their Commander in Chief)
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To: dennisw

In other words...everything bad that happens in the future will be the fault SUV driving Christians and GW Bush.


6 posted on 07/21/2005 6:25:51 AM PDT by Ron in Acreage (It's the borders stupid! "ALLEN IN 08")
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To: A. Pole

ping


7 posted on 07/21/2005 6:26:20 AM PDT by dennisw ( G_d - ---> Against Amelek for all generations)
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To: wideawake

There seems to be no end of ignorant idiots on FR and in the larger world of New and Old Media who know absolutely nothing about economics, yet who are simultaneously willing to not only analyze but to predict major macroeconomic developments.
__________________________________________________________

Alas you are so right and who are UNWILLING to learn the least bit about how economies work. One might think someone interested in this area of prediction would want to at least try to learn how economies work.


8 posted on 07/21/2005 6:26:56 AM PDT by JLS
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To: dennisw

This is the same guy that was touting Japan, Inc. as the next great power back in the 80's. I don't think he's ever been right about anything.


9 posted on 07/21/2005 6:28:43 AM PDT by jalisco555 ("The right to bear weapons is the right to be free." A. E. Van Vogt)
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To: dennisw

He didn't even cover the 2014 bubble in beachfront Nevada and Tennessee real estate.


10 posted on 07/21/2005 6:31:47 AM PDT by KarlInOhio (Bork should have had Kennedy's USSC seat and Kelo v. New London would have gone the other way.)
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To: dennisw

Even Madonna can write (poor) fiction..


11 posted on 07/21/2005 6:32:15 AM PDT by ExtremeUnction
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To: JLS
One might think someone interested in this area of prediction would want to at least try to learn how economies work.

You would think.

Yet I have been informed on this forum that:

(1) A dollar-pegged currency is the same thing as a floating currency.

(2) An optimal use of financial resources is to have zero national debt.

(3) The budget deficit and the current account deficit are the same thing.

(4) Only Americans should invest in treasury securities - foreign investment of any kind in America is dangerous, but credit investment is deadly.

(5) Foreign creditors can "bankrupt" Ameerica at a moment's notice if they choose to.

(6) Anywhere from 30-50 American states have "declared bankruptcy".

The list of idiocies goes on and on.

12 posted on 07/21/2005 6:35:06 AM PDT by wideawake (God bless our brave troops and their Commander in Chief)
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To: wideawake

You mean to say that oil is a commodity, money is fungible, and the oil producers are dependent on their income from oil?

This is truly surprising....


13 posted on 07/21/2005 6:37:04 AM PDT by proxy_user
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To: ClearCase_guy

How many MPG am I going to get on my Flying Car in 2016?


14 posted on 07/21/2005 6:38:21 AM PDT by gridlock (ELIMINATE PERVERSE INCENTIVES)
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To: gridlock

Oh, wait a minute. My flying car is going to have nuclear power! I forgot...


15 posted on 07/21/2005 6:42:12 AM PDT by gridlock (ELIMINATE PERVERSE INCENTIVES)
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To: dennisw

Its all BS. Not a single mention of the big nuclear attack on August 6th.


16 posted on 07/21/2005 6:42:55 AM PDT by Bob Buchholz
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To: dennisw
It's not Venezuela's oil...it's ours. We just let them pump it out and sell it to us.
17 posted on 07/21/2005 6:51:15 AM PDT by FlatLandBeer
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To: proxy_user
You mean to say that oil is a commodity, money is fungible, and the oil producers are dependent on their income from oil?

Oil is not so fungible when China ties up Venezuelan and Iran oil with long term contracts. Which they just did. What do you think these two rogue nations get from China for their oil? Weaponry and military technology perhaps?  In fact the Chinese strategy is to get  a lot of oil under long term contacts to their three state owned oil corporations. One of which is making noises about buying up UNOCAL>

18 posted on 07/21/2005 6:54:57 AM PDT by dennisw ( G_d - ---> Against Amelek for all generations)
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To: FlatLandBeer

heh! see me post #18


19 posted on 07/21/2005 6:55:48 AM PDT by dennisw ( G_d - ---> Against Amelek for all generations)
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To: dennisw


We're all doomed.
Doomed!
DOOMED!!!

20 posted on 07/21/2005 6:56:59 AM PDT by Petronski (So, ma cherie, you like ze boum boum?)
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