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As The World Burns…

21 February 2011 5 Comments

It’s amazing how the world works.  I’ve been saying for years now that massive uncertainty is looming and that we’re in for some interesting world events.  The crazy thing is that it’s nearly impossible to imagine what exactly that will look like.  Nobody anticipated that Egyptian protests would be the possible spark, but indeed it was.

With Egypt toppled, protesters are moving on to other countries.  Libya is close to falling, and now the eyes of the world will turn to places like Saudi Arabia where an effective uprising would really throw the world off – mostly due to the flow of oil to the global markets.

Commodities are already responding with crude oil closing in on $100 (Brent is already well above), gold back over $1400 and silver pushing toward the mid-30s.

Without a doubt, the rule that every government intervention into the economy will have an unintended consequence elsewhere holds fast.  It’s just impossible to predict what those consequences will be.

The global government and central bank intervention in world economies has indeed started to come full circle with worldwide inflation and increasing unrest.  This unrest is now even in America as Unions throw their hissy fit up in Wisconsin.

As an aside… I’m not against all Unions, but I’m definitely against Public Unions.  Why?  Because public unions can band together and elect leaders and affect public poilcy that has a direct influence on their compensation.  It is a ridiculous conflict of interest.  I recognize the good that unions have performed in the past, but these unions need to be confined to the private sector.  When a union is in the private sector, that union is essentially a partner with management on the success of that company.  Now in a free market, if the union is overbearing, it can potentially bring down that company.  This isn’t a bad thing.  It keeps unions in check in a free market manner.  This has been the case as companies like General Motors have essentially  “gone under” – however, the end result was avoided since the government came in and propped up the company.

If Unions are confined to the private sector, and then not bailed out in the case of a company going bankrupt, unions will be kept in check naturally without the need for political action.  This should be the goal.

But, back to the world burning…. welcome to the global economic recovery Ben Bernanke style.

5 Comments »

  • TaJ said:

    The problem with ending public unions is that someone has to represent labor. Union-busting in private industry has gutted private sector unions, probably for good, and covering the problem with government regulation has not really worked that well in America, mostly because as a country we're totally unenthusiastic about it so we don't really try.

    Unions are a terrible way to do it, of course. They're just as corruptible as everything else, and the collision between unions and crony capitalism is responsible for the pension debacle (neither side could have done it alone). However, they're what we have available to work with. It is what it is.

    The Middle East (and, no doubt in a few months when it warms up a bit and austerity starts to really bite, Europe) is a good example of what happens when you don't allow people a seat at the table, and expect them to just suck it up, forever. If you take away people's ability to bargain and have their collective voices be meaningfully heard, then all they have left is the street.

  • xfiltrate said:

    Kevin, thank you for introducing world economic affairs to us. You are right to do so, and to
    point out the relationship between the U S economy and the world economy.

    Anyone who has read the Council on Foreign Relations (newsletter), Kissenger or Soros could have predicted Egypt. Libya etc…

    World food prices are rising because commodities are sold worldwide in dollars ad dollars are systematically being devalued and in fact losing purchasing power…. The "revolutions" in the middle east have a lot more to do with being able to feed one's family than idealistic ideals of how one should or should not be governed. How do I know? I have lived in the middle east….

    And, the plan by the elite, read oil interests, is to use the "revolutions in the middle east as justification for opening off shore U S oil fields and oil fields in Alaska. Not that this will lower the $5.00 + per gallon gasoline price you will soon be experiencing in the U S , but it will give
    insanely hugh profits to U S / British oil interests as opposed to the Saudi's and their neighbors…

    Really, the only ones at the table are the elite, and they do not plan on giving up their chairs to anyone – ever…

    Anyone or anything else , other than what goes on at the table of the elite, is just a distraction no more meaningful than Justin Bieber, sports coverage, the latest sex scandal, or for that matter the latest demonstrations by unions either private or public… the only possible salvation is for the masses to demand that democratically elected leaders become accountable to the people who elected them, not only to the corporations who financed their election, or in the case of the middle east to the puppet masters who put them in power.

  • localtimezone said:

    A powerful admonition to Washington groups on why movement building needs to happen (and why movement building is not the same thing as 'grassroot­s mobilizati­on' to pass specific policy proposals.­)

    I was shocked to see how close the insider horse trading got to passing a weak senate bill in the spring, given and how little public interest or awareness there was around it at the time.

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