Another bowl of Credit Crunch

In Deadbeat 17 I suggested that the bankers would be stamping hard on the economy to replace their gambling losses, rather like Tony Soprano demanding more vigorish from his marks. Sure enough, last week 160,000 Egg Card holders felt the force of that boot. Now to the owners of Egg (funnily enough it's Prudential Insurance) this is just good business practice - dumping your least profitable customers to up the percentages and the payback - but to the actual dumped customers it was at least an annoyance and, for some, disaster.

Northern Rock ex-employees have seen a lifetime of thrift, all those years of deferred gratification, wiped out and made meaningless. All they get back is pretend sympathy from a government minister on Question Time. (The government doesn't give a rat's fart for such people. They have trained themselves to live on nothing while they squirrelled away. They won't even notice the difference.)

Almost every day the TV and the newspapers serve us another helping of financial doom. And what a dog's breakfast it is. Property prices are in free-fall, shares are mostly going down. The currency markets are in complete turmoil. The dollar is set to continue (and accelerate) down the slippery slope of inflation and tumbling exchange rates as the world catches on to just what an economic mess it is in.

The USA is no longer self-sufficient in oil or food, its workforce and its industrial machinery are ageing, it is involved in catastrophic foreign policies which are costing stupendous amounts. It is spending a lot more than it earns.
The USA's major asset is the dollar itself, 'cos all the world wants 'em. Recent initiatives by the US moneymen have been, effectively, printing lots more dollars and giving them away in order to stimulate growth, stave off recession... blah blah. As a direct result the dollar is now worth less. Soon the big money movers start selling more. Of course they make their millions whichever way the market goes - and a bastard like George Soros takes the equivalent of twenty teaching hospitals of our money and puts it in his bank. Bastard. (Sorry about that - pet hate).

I think that future generations will look back and see this moment as the beginning of the end of American supremacy in the world. It really is that important.

The dollar's decline is a BIG problem for the world economy - most countries' foreign exchange reserves are in dollars, and they are seeing their sovereign wealth disappearing like snow on the water. Which is why the petro-dollar sovereign wealth funds, in particular, are so busy buying everything they can. The last phase of the credit crunch saw various banks selling off significant percentages of themselves to these funds in return for ready cash to plug their various black holes. The next phase involves the failure of the insurers who jumped onto that rotten bandwagon - and gets even more bloody, and sees more ownership transferring out of Europe and the USA.

So, worldwide, there is a huge mountain of cash looking for a new home.

All that cash is coming out of derivatives, insurance, banks - the invisibles which have fuelled the bubble and are now revealed to be as insubstantial as their name suggests - and going back to basics; buying stuff that people actually need like food, oil, iron, wheat, pork bellies (or that paragon of intrinsic value, gold).
As a result of all this, the commodities market is the 'in' place for the smart money, and money is piling in. So wheat prices are rocketing, ditto oil, gold....
The increase in the price of tea is due to abhorrent goings-on in Kenya, but all the 'smart money' sees is another opportunity to move out of the carry trade and into commodities.
The rich bastards have thrown away lots of their money (to the poor - see Deadbeat 17) and the poor are going to have to pay it back. That's all of the poor, all over the world. If the poor want to eat or wear clothes (it's their lifestyle choice, after all) they will need food, goods and the oil to transport them. All those things are going to be very much more expensive. If you can't afford it, too bad. The difference, in this 'payback' phase of the credit crunch, is that instead of a wunch of bankers (note deadbeat collective noun) having to make do without their new Ferraris, it's children having to do without lunch; it's cooking oil riots in Indonesia; in the final analysis, it's starvation, death and disease - and all in the name of greed.

It's like fish being too busy eating each other to get out of the pond before it dries up. Which puts us all lower down the food chain than we would probably like to think.

None of the human cost of any of the above shows up on any balance sheet. No-one knows how to express it, let alone measure it. We don't even have a vocabulary, let alone the maths. Whereas we can calculate the financial ramifications of 'unforeseen operating expenditure' (riots, assassinations, coups d'etat) and factor them into return-on-capital-employed analyses to three decimal places. Which demonstrates how screwed-up the world is, and why Deadbeat won't be sorry to see it change utterly.

Naturally, the rich bastards have got it wrong, they've missed the obvious - if you take a man's savings, you get a grey-haired man being humble yet brave on national TV. When you take bread from a baby you get parents who will tear your throat out.

The Famine Wars have started, make no mistake. My conspiracy-theorist friends would say (or be told to say, by their Central Control) that it was for this moment that the unjust gun-laws were passed (to disarm the law-abiding population) and the eavesdropping/surveillance infrastructure developed. Certainly the cameras are better at deploying heavily armed police quickly and effectively against rioters than they are at catching criminals.

It is time. We need to resist, and fight back. Clearly, armed insurrection is for losers. Against determined attack using truly revolutionary tactics, however, they are powerless.

Don't riot. Don't arm yourselves. Don't fight them on their terms.
Be creative. Laugh at them.

Max out your credit cards and go travelling.

Fuck 'em.

Cheers, Deadbeat