The World According to Tempus

The beginning?

For a few years, I've been preaching about our impending doom.... so many resons why the system will fail:

- US Federal Deficit
- US Trade Deficit
- Money Supply inflation
- Pension Shortfalls
- Consumer over-indebtment
- Real Estate Bubble
- High Tech Bubble.. (nah, that's so 2001)
- and... out-of-control derivatives.

Well, as we know the tech bubble burst. The real eastate bubble is showing signs of being about to burst.... what was that about the last item?

Major tragedies

I would like to start this post by sending out my condoleances to all the families and friends who have lost someone in the terrible incident on September 11th, 2001. It was truly a major and shocking event.

All loss of life is sad, and premature deaths like this are specially mind-boggling.

However, a friends comment yesterday triggered some thoughts which I wanted to put in there about major tragedies. I wanted to put the event in perspective compared to other major disasters. In a few minutes, I came up with a few of them in history. Here is what it looks like:      

Problems with offshoring

Fortune ran an interesting story in its April 17, 2006 issue:

http://money.cnn.com/magazines/fortune/fortune_archive/2006/04/17/8374287/index.htm

Basically, it talks about a US Furniture maker and its woes with offshoring. This is something that would obviously become a problem when companies started to take advantage of lower wage rates in Asia.

Will the U.S. attack Iran?

There has been a lot of talk recently about a potential move of the U.S. against Iran. The oil-consiracy theorists swear that it unavoidable, for example. There are even rumours of a nuclear attack by the US.

I had believed back in 2003 that it would happen right away.

My logic? A vision of Bush playing Risk, with a bunch of his chips/armies stacked in Iraq, ready to sweep half of it to Iran or Syria, two trouble zones... too bad he didn't have his lucky die.

Iraq War Costs

I'm a bit behind in my reading of The Economist, once again, but I was just reading this article:

http://www.economist.com/displaystory.cfm?story_id=6787433

I was concerned by this comment in particular:

Why is the Bilmes/Stiglitz estimate so high? Partly because they attribute a number of economic ills—oil prices, interest costs and foregone government projects—to the war in Iraq. These seem questionable claims. Oil prices are indeed much higher now than in early 2003, but the war's impact on global oil supplies has been relatively small; a surging world economy has driven up demand. Including the interest payments on America's Iraq spending is also strange. Alan Krueger, a Princeton University economist writing in the New York Times, has likened this to counting interest payments on a home mortgage as part of the purchase price. As for government projects, that estimate hinges largely on the perennial debate over whether more public investment would yield net benefits for the economy.

March 20 to 26, 2006: Iran-USA, beginning of a major world crisis

This is an article, posted by LEAP/E2020, a European think-tank. It is a very interesting, if scary article. I had shared this article with some friends last month, and now we are past that week. By now, the two items that they claim will change our economic world have happened. I will surely discuss both in future postings. The two items are the opening of the Iranian oil bourse last week, as well as the Federal Reserve Bank's decision to stop publising M3 figures, which is the wide money supply numbers (the amount of US dollars in circulation).

http://newropeans-magazine.org/index.php?option=com_content&task=view&id=3463&Itemid=85

Here is the article's intro:

Or « The End of the Western World we have known since 1945 »

The Laboratoire européen d’Anticipation Politique Europe 2020 (LEAP/E2020) now estimates to over 80% the probability that the week of March 20-26, 2006 will be the beginning of the most significant political crisis the world has known since the Fall of the Iron Curtain in 1989, together with an economic and financial crisis of a scope comparable with that of 1929. This last week of March 2006 will be the turning-point of a number of critical developments, resulting in an acceleration of all the factors leading to a major crisis, disregard any American or Israeli military intervention against Iran. In case such an intervention is conducted, the probability of a major crisis to start rises up to 100%, according to LEAP/E2020.