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Dover Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-25-06 09:58 PM
Original message
Global Economy Faces A Dangerous Year
RISKY BUSINESS
Global economy faces a dangerous year
By Jephraim P Gundzik

Rising inflation and falling home prices are likely to push the US economy into recession by the second half of 2007. Gathering economic weakness, combined with negative real yields on US Treasury securities and growing political pressure to weaken the dollar will lead to significant dollar depreciation against most currencies.

Economic growth in Asia, Europe and Latin America will also weaken in 2007. Slowing global economic growth will be very bad news for equity markets around the world. Dollar depreciation and rising international energy and grain prices will be good news for precious metals.


..snip..

The growing use of corn, wheat, soybeans and other grains to produce biofuels is expected to nearly double prices for these commodities in 2007. In addition to grain-related foods, prices for other food staples that are grain-dependent, including meat and milk products, will also head higher in 2007. The result will be much higher than expected US inflation. Consumer price inflation (CPI) in the US is already significantly higher than CPI in Germany, Switzerland, the UK and Japan. In 2007, US inflation will accelerate, widening the inflation gap between it and other countries.

By every measure, inflation in the US has clearly accelerated since 2004. In 2005, the Federal Reserve’s preferred measure of inflation, the personal consumption expenditure (PCE) deflator exceeded 2% for the first time since 1995. The core PCE has continued to accelerate in 2006, and will likely top 2.5% by the end of the year. This is significant because the Fed’s stated aim is to keep core PCE between 1.5% and 2%. The steady acceleration of core PCE shows that inflation from rising energy prices has penetrated the broader US economy.

Despite the obvious acceleration of inflation, the Federal Reserve shifted monetary policy into neutral in late summer. The Fed has justified more accommodative monetary policy in the face of rising inflation by suggesting that slowing US economic growth will eventually mitigate inflation.
This is a huge gamble because US inflation is being pushed higher by supply-driven energy price shocks rather than demand...cont'd

http://www.atimes.com/atimes/Global_Economy/HL23Dj01.html
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originalpckelly Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-25-06 10:14 PM
Response to Original message
1. OK, who's buying some gold?
Sounds like anyone interested in investments should get into commodities next year.
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happyslug Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Dec-26-06 04:55 PM
Response to Reply #1
4. Why waste your money, buy gasoline and/or oil instead
The price climb of either will exceed the price climb of gold. If you have some rural real estate buying a 500 gallon tank and filling it with 500 gallons of gasoline and holding on to it for 2-3 years may produce a 2-300% profit. Gold, except a a medium of exchange, has limited uses, while Gasoline and/or oil can be use by almost everyone (or could be sold to someone who can use it).

Northern Tool and Equipment ha a 500 gallon tank available for $849.00
http://www.northerntool.com/webapp/wcs/stores/servlet/product_6970_47575_47575

OR buy a never used Military Surplus 10,000 Gallon Collapsible Tank Bladder for $1995.00:
http://www.galleria-e.com/cgi-bin/Colemans.storefront/en/product/133701

Think about it, buy 10,000 gallons at today's prices and sell it for $5 a gallon this summer!!!!

Remember, while Gold can be buried in your bank yard, it still has to be watched. So the fact that gasoline/oil is harder to hide is not that much of a disadvantage.



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Contrite Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Dec-26-06 01:52 AM
Response to Original message
2. Conclusion:
Expect a severe downturn in the world's economy over the next two years as Bilderbergers try to safeguard the remaining oil supply by taking money out of people's hands. In a recession or, at worst, a depression, the population will be forced to dramatically cut down their spending habits, thus ensuring a longer supply of oil to the world's rich as they try to figure out what to do.
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happyslug Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Dec-26-06 06:30 PM
Response to Reply #2
6. Don't; assume a conspiracy when plain stupidity will suffice
First, Bush and Company can NOT handle crisis, they shown that during Katrina. The GOP game plan in nay administration is to control the agenda and get what they think they can get and downplay and ignore anything else. Thus when the California energy Crises hit a few years ago, Bush offered to reduce the environmental restrictions to ease the problem, when the Governor said the environmental restrictions were NOT the problem he acted shocked, all energy problems had to be the fault of environmental laws NOT do to his energy buddies manipulating the system. This show up again during Katrina, there was NO WAY you could have a "Private enterprise" solution to Katrina, and since that is the ONLY SOLUTION Bush and Company understood they stood around looking lost for they did NOT want to show what Government can do, and are design to do, i.e. handle and resolve crises. The situation in Iraq is another example, the only solution is a massive influx of Government funds and Building projects which Bush and Company oppose (I.e. Private enterprise is to do that job, even where it is not).

All of the above is best explained by Bush and Company opposition to Government, they do NOT want Government to solve problems for that will show Government is NEEDED. They want to show Government is NOT needed, and things are best left up to "Private Enterprise" to solve. When somethings comes around that shows the opposite, i.e. The California Energy Crisis, Katrina and our failure in Iraq, they want to ignore it rather than accept WHAT THEY REJECT AS A MATTER OF IDEOLOGY.

The same things with the upcoming energy crisis, you had Admiral Rickover talking about it in the 1950s (i.e. oil will peak and production drop drastically in and around 2000). (For more see http://www.energybulletin.net/23151.html). This has been know for YEARS if not decades. In many way the predictions of the 1950s were off only because of the energy Crisis of the 1970s delayed peak by about Five to Six years do to all the energy saving done in the world during the 1970s do to the high price of oil (Which was caused by Politics NOT real energy shortage as we are facing now).

One you realized that the peak oil has been viewed as a potential problems for decades why no resolutions? The reason was political. At the local level most expansion has been in developing new Suburbs since the start of the Trolley Suburbs in the 1890s. Thus if you want to make a killing you looked at how Transpiration was developing. Till the 1920s it was where the new Streetcar Lines were going. Since the 1920s it has been where the new roads were going. If you knew where a road was going you purchased the area around that Road and watched you investment sky rocket once the road was announced (and if you see the project being canceled selling the land at no less than you paid for it). Thus suburban development and improvements in Highways have been hand in hand since at least the 1920s. The 1970s saw the only time in the 20th Century where suburban expansion actually halted (and movement from the country side to the Urban areas reversed). Starting in the 1980s things returned to "Normal" as development of highways and Development of Suburbs continued hand in hand.

At the National level, building Highways was a way to get votes, for it tied in local interests to the interstate highways system. Even Rural America bought into this as they saw increase highway spending as a way for them to go further. The Idea of going shopping once month became passe even in Rural America a the Car permitted more frequent shopping and other act ivies.

Whenever someone said anything bad about the above, he or she was called a dreamer for living in the past (Especially whenever someone said lets try to preserve our existing mass transit system) or an idealized radical for suggesting that keeping some areas from being made suburbs. To many people had to much invested in expanding the urban areas for such ideas. The thought that you may want to share a means of transportation was even made a scare tactic as auto makers tried to convince people that it was dangerous to take Public Transit when you can be safe in your own personal Automobiles.

Simply put, we are in the situation we are in because NO ONE WANTED TO TAKE THE HIT FOR RAISING TAXES TO PAY FOR WANT ITS NEEDED. All they saw was people complaining about the taxes, while the people who will get the benefit will be their successors (i.e. 10-20 years from now is when we will see the benefit, not today when we have to RAISE TAXES to get the project started). Now, starting int he 1970s some people, both in and out of Government started to address this problem. Thus you saw the first effort at energy efficiencies, the 55 MPH speed limit surviving for 10 years AFTER the price of Gasoline dropped like a rock, the Corporate Fleet Average maintained to this day, and the various Rails to Trails movement. The later, the rails to trail movement, satisfies two objectives, first it kept together old rail lines that we may have to reinstate if the price of Gasoline becomes prohibitive, but more importantly it permitted people to get use to biking in an area where they feel safe, i.e no cars or trucks. When peak oil hit, one of the way we are going to have to deal with peak oil will be increase bicycle use and if more and more people have a bicycle they will take that option when the alternative is NOT to get to work at all.

Other aspects of people trying to deal with peak oil while avoiding the topic is the various improvements in the Interstate Highways system over the last 30 years. For Example Boston's "Big Dig". The "Big Dig" did two things, it first eliminated the barriers from biking and or walking in the Downtown Boston Areas. The Barriers were the old interstate highways system that cut off huge areas from each other when built in the 1950s. The "Big Dig" re-connected these neighborhoods. The "BiG Dig" also permitted easier flow of Automobiles to ease congestion so to ease fuel usage (and pollution). While the later was the main reason for the construction, the re-connection of old neighborhoods permitting pedestrians and bicycle Traffic will be of greater good when peak oil hits hard.

Thus the problem today is NOT that people have not ben planning for Peak oil, most people familiar with Peak oil and accepts that it will happen some day (the real debate is when not if) have tried to address the issue but are facing people who do NOT want to accept the concept of "Peak Oil" for it means rejecting what they have been doing for over 100 years and now accept as the ONLY "American way of Life". These rejectors of Peak Oil will always reject Peak oil until they have no choice but to accept it (and then prefer conspiracy not peak oil for the change). You are NOT going to change them for their "World View" is that suburbia is not only the "American Way of Life" but the best way to live ever devised by mankind. No matter how much it can be shown to be non-sustainable these people "fight" for it, but fighting any other alternatives including moving back to the Country, moving closer to one's work and accepting Mass Transit was the most efficient way to move people around.



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Contrite Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Dec-27-06 01:02 AM
Response to Reply #6
7. Yes you are correct that they do want to undermine government
Edited on Wed Dec-27-06 01:07 AM by Contrite
in order to destroy US sovereignty and implement their one world government, starting with the North American Union.

http://www.tucsoncitizen.com/daily/opinion/34211.php
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oblivious Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Dec-26-06 02:20 AM
Response to Original message
3. Corn, soybean, wheat prices to double?
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happyslug Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Dec-26-06 04:59 PM
Response to Reply #3
5. Do to the increase cost of planting and harvesting do to high fuel prices
AND the higher demand for use as a fuel do to high fuel prices. Either way the price will go up. If you remember the early 1970s, the price of food went up as the price of fuel went up. I remember the "Beef Boycott" of the early 1970s do to the high price of beef which was tie din with the increase in the price of grain do to the increase in the price of fuel (and this is all BEFORE the OPEC oil Embargo after the Yom Kipper war of 1973).
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