Imperial Decline?

I've been writing about economic decline and the credit burst for several years now. The majority of the ruling classes have finally moved the majority of their profits into save harbors like bonds and gold (what about you?) - so the signal was given to officially announce the specter of recession. Another world is possible and in fact being built in Venezuela. Unfortunately, many will suffer in the coming downturn.

"from 1920 to 1960, Venezuela was the leading world exporter of oil and here, through our Caribbean sea passed thousands of boats loaded with oil: but they left nothing to benefit the peoples of the Caribbean, the sister peoples of Latin America. Today revolutionary Venezuela places this wealth, above all, at the disposal of our sister peoples of the Caribbean and of Latin America: not for the North American empire." Hugo Chavez Frias, from closing words at Fourth Petrocaribe Summit.

Returning to Europe after some time away is like visiting an unloved relative falling into dementia. It may be unwelcome, but one sheds no tears. The persistent optimism of Western Bloc political and financial leaders is bizarre. For example Brian Cowen, Ireland's Finance Minister presented a budget recently based on projected inflation through 2008 of a little over 2% and growth in gross domestic product at 3%. Subsequently, Ireland's Economic and Social Research Institute's latest quarterly economic commentary reckoned growth at nearer 2% and inflation at over 3%.

But as this decade's credit boom slumps into bust, service-skewed economies like those in the US, Britain and Ireland are likely to be hit much harder than these forecasts suppose. Most people, businesses and households, more or less heavily in debt, will cut back hard on non-essential spending. That will probably create a vicious downward spiral as increasing numbers of people are made unemployed and overall consumer demand drops correspondingly. At the same time, creeping inflation will make everything dearer for people to buy. The full effects of all these processes are unlikely to work themselves out until late 2009 at the earliest.

Rich-country economists read their tarot card statistics blinkered by arrays of crystal-ball maybe-maybe-not data. But for millions of households in Asia, Africa and Latin America facing significant drops in family remittances as rich country economies go belly-up through 2008, real life stares them brutally in the face. For low-income families and communities in Africa, Asia or Latin America the effects of the coming recession will be far more devastating than for people in Europe and the US. Countries bullied into US-style trade-in-your-sovereignty pacts or EU-style Europeans-only-let's Party Agreements with the globalization devil will find their souls quickly ripped apart as the funny-money credit boom collapses into dwarf-star stagflation or a recessionary black hole.

[Full article linked below]

Solo, Toni. Varieties of Imperial Decline: Rearguard Success, Strategic Defeat. ZNet. 03-Jan-2008.