Winter of our discontent
It appears that households will paying big bucks
to keep themselves warm this winter. Cost of natural gas is keeping up with the
cost of crude oil. Here we have yet another shock which an already weakened and
shell shocked economy must face.
Because of America's status in the world as
"lendor of last restort"—which is to say, because the dollar is the
world's leading currency, the gold of this economic era—we here in the
U.S. have been able to get away with economic and monetary policies that would
have toasted the economy of any other nation at any other time in world history.
Only the unique conditions facing the U.S. have enable us to get away with it.
But the question has been for several years now: how much longer? And what will
the inevitable crackup look like? Will it be a deflationary crackup, with a
massive chain reaction of debt defaults triggering an enormous shrinkage in the
money supply? Or will we go the seventies stagflationist route, only this time
with higher rates of inflation and worse unemployment? Whichever route we wind
up taking, one thing we must be particularly wary of: if oil and other energy
supplies remain, as they are now, at all time highs, it does not seem likely
that the disaster can be fended off much too longer. So unless oil processes are
brought down to a more managable level, this coming winter really could prove
the winter of our discontent.
Posted: Sun - October 24, 2004 at 07:59 PM