Wednesday, May 21, 2008
Splat!!!I was taking an evening nap (not because I'm a woman of leisure, far from it, but because I've been working the last nine days in a row, getting ready to take a week of vacation) when I woke up suddenly sweating, yelling, "The money's gone! The Money's Gone!" I was dreaming that I had gone to the bank where my hard-earned retirement savings is kept, the bank looked oddly like the Capital Building, except that the dome was made of gold, and when the teller opened the box that contained my entire life savings, there were only a few dimes, and some baseball cards. I waved my monthly statement in the teller's face, but in my dream, the teller had vanished, and I was standing alone in an empty vault, hearing a sound that reminded me of a soft squishy substance being flung against a wall.
It was the sound of the shit hitting the fan.
It has been a bad week for the markets, today the Dow lost 215 points, and oil soared to $133 a barrel. In the recent past, when oil topped $100 a barrel, markets freaked, losing much of their value, and the Federal Reserve took a really sharp pair of scissors, and began cutting interest rates like never before. When interest rates are cut severely, the result is inflation, and we are now seeing the end product of the Fed's attempt to avert the fallout from the sub-prime crisis. The two pillars of the American economy for the past 2 decades, have been cheap oil, and easy credit. One of those pillars tumbled in August of last year, and now, in spite of George Bush's recent trip to the Kingdom to beg for more oil production, the last pillar is crumbling.
The thing that is most troubling is that our life savings are all tied up in the markets. Those dollars that we have saved for a rainy day are not in a savings account, and even if they are, they are invested by our own banks in all sorts of things that are now questionable. Will money actually exist in these accounts if and when we have to open them for an emergency?
Okay, I lied when I said that the most troubling aspect of this crisis was our savings accounts. More troubling is the fact that with oil prices going through the roof, what options do we as a nation have, other than oil? Our railroads have been replaced by the trucking industry, our mass transit systems can't handle the commuter traffic we will need when oil hits $200 a barrel, and even so, the cost of goods that are shipped from around the world, and across the country will be so over-priced from transportation costs, that we will (if we are still lucky enough to have jobs) be living hand to mouth.
The good news is, those mini-vans abandoned by the side of the road...since people will no longer be able to afford to drive them...will make great temporary housing when we all default on our mortgages.
I want one with cup holders and a sun roof.
Technorati Tags: economy, oil prices,
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No subject for immortal verse
That we who lived by honest dreams
Defend the bad against the worse."
-- Cecil Day-Lewis from Where Are The War Poets?
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