Here in Beaumont-land, we're inagurating a new feature. The Heritage Foundation has its Morning Bell feature; however, my morning behavior is anything but bell-like. Bill the Cat, from the old "Bloom County" comic strip, is my role model for the pre-9AM hours.
So, I hereby announce (with a fanfare of coughs and grunts) the Morning Blah. A concise analysis of the day's trends with no attempt whatever at slippery concepts like "balance" or "fairness".
Seriously, if you aren't convinced that the country is in trouble, them you haven't been paying attention. Pull your head out, abandon your preconceptions, and think things through.
Oil prices continue to drop. CORN prices are dropping; not a trend that most would anticipate, maybe. Folks, when bulk commodity prices drop -- including foodstuffs -- it illustrates a deeper weakness in the economy than generally realized. As we have previously noted, we like lower prices, but the process of deflation would entail a great deal of pain for most people.
Contrast the USA's economic decline with the BRIC economies (Brazil, Russia, India, China), which are growing, some with rates approaching 10%. Are these countries going to be the new world leaders? Well, not necessarily.
Brazil is energy-independent and exports many agricultural products; Russia has oil and natural gas; India has a rapidly growing industrial base. China, however, is much more dependent on exports of finished goods than the others, and has been playing a shell game with its currency for years. The Chinese must maintain an appearance of rapid growth or face devastating unrest.
Consider this scenario: as the capacity (due to economic circumstances) or willingness (due to resurgent patriotism) of the US to import Chinese goods diminishes, China would face a crisis. As a nation built on exports --primarily to the US -- founders, the losses must be made up in some way. The huge stocks of precious and strategic metals that the Chinese government has accumulated will begin to lose value as the world economy weakens further.
In order to provide at least a temporary infusion of cash, and also "save face" ( a concept the West understands little of) the Chinese dump large quantities of metals on world markets. Gold, silver, platinum, germanium, etc. -- prices drop abruptly.
In the past, we have seen that abrupt price drops in one commodity can begin a cascade effect among other commodities. One result is that world currencies can be diluted. When that happens, Brazilian grain, Russian oil, Indian goods are all worth less to buyers, and cost more to produce. Of course, the same factors affect the US, Europe, and Japan. We can see where it goes from there.
Some economists are beginning to toss around the term "depression". That would seem an accurate desription of the effects of such a scenario.