Money: derived from the Latin "moneta" which originally meant "warning" (as Juno Moneta was the goddess of warning). "When coinage was devised by the Romans, they set their mint in her temple and the goddess became the guardian of finances."
In October of 2002, I wrote a guest column for a local weekly entitled "A Greater Depression". In January of 2003, I printed and passed around a one-shot newsletter called "The Regressive" which closed with these words... "These economic problems will in all likelihood reach a point of critical mass unless the most extreme changes take place in the Hearts and minds of people everywhere. The collapse or the change may not take place in 2003, but the new year is likely to bring war and depression." In 2004 I wrote an online article entitled "The Imminent Market Crash and the Depressing Economic Collapse." These are a few of my articles which, I feel, establish my credentials to write confidently about the severe economic crisis we now find ourselves in.
Admittedly, some of my predictions were slightly premature and things haven't fallen apart precisely as I foretold (I never got around to printing "The Regressive" #2 regarding the housing bubble mentioned in issue #1). However... the war did happen, of course, and my economic points about the cost of petroleum were all too accurate. Anyone who short sold the Big 3 automakers based on my analysis of the automotive and petroleum industries would have turned quite the pretty penny. Unemployment rates have skyrocketed (as predicted) and would appear even higher if it weren't for underemployment masking those numbers. The bottom line is, we are now very much in an economic crisis and I feel as qualified as any economics professor to comment on the situation. And so I will...
Just as in 1929, the common citizen had been encouraged to invest more regularly in the stock market, right before it's peak, and now the rug has been pulled out from beneath them. Touted as the soundest, surest, most profitable investment... many average citizens tied their hopes and their retirement funds to the stock market. As before, many have already lost their life savings.
The bailout farce deserves more attention than I want to give it but, suffice it to say, at best, it's too little and too late. They could, basically, print more money and technically save these failed businesses. But to the extent that they don't overwork their printing presses (digital or conventional) or, out of thin air, issue some other form of promissory notes (drawn towards the national debt), domestic spending of all sorts will be cut -- and these various programs (whether they be for schools, agriculture, or jet fighters) would have spent that money and fueled the economy as well. Without the funding, these various institutions will have to make cutbacks. They won't be able to buy as much (hurting the GDP) or pay their employees as much (whose collective spending also fuels the economy).
When the latter happens, people realize the worst arbitrary quality of money (and would thus prefer to hold on to actual items with inherent worth while moving away from monetary exchange). When the former happens, the masses don't have enough money to buy the typically massive amounts of certain products like computers, cars, designer clothing, etc. (so those products won't require a workforce to produce them and the subsequently laid off workforce won't then be able to buy still other products -- creating a deflationary spiral). In either case, people will lose confidence in the dollar because it is either worthless or because it's too hard to get a hold of. No one wants it or no one has enough of it to get what they need. However the government goes about financing this bailout, the general public will lose faith in the state.
German woman fueling furnace with worthless cash (1923).
"Only when the last tree has died and the last river been poisoned and the last fish been caught will we realise we cannot eat money."
-- Old Cree saying
Specifically, our global agricultural system depends most heavily on petro-chemical fertilizers and pesticides. As petroleum is a finite (non-renewable) resource we will not be able to maintain production of those petro-chemicals which the agricultural system and billions of people depend upon. And wishful thinking about a ready substitute will not make one magically appear.
Petroleum has been, without a doubt, the primary fuel of industrial civilization -- and it's been 1/2 depleted. It's as simple as that. The underground lakes of oil have been half sucked dry and literally burnt up. And the dependance on petroleum has increased so dramatically with each passing decade that the remaining oil will be extracted at a much quicker rate. Each passing decade of extraction far outpaces the previous decade (as international demand skyrockets). But the geological forces which create petroleum oil take millions of years to produce more. Scarcity is an obvious and immediate factor.
The global ruling class knows this all to well. It's the fundamental reason why the U.S. invaded Iraq and why the sabers are now being rattled in the direction of Iran. It's a fact not to be overlooked or forgotten. Even if the wars there take decades, and require brutal escalation, in the end the U.S. is positioning itself to be atop the last and largest remaining oil fields. The U.S. intends to have the last source of petroleum to maintain it's dominant military machine. This is arguably why they are not immediately concerned with increasing petroleum extraction in Iraq, and why, cynically, they are not overly-concerned with the current health of their diminished industrial economy.