Humans being humans we have a strong desire to find someone to point the finger of blame at with this global economic crisis. The issue is the truth is already known but nobody wants to admit the obvious. Because of that the scapegoat search goes on so we can feel good and continue to ignore the unspoken truth.
Predicting the future is a fine are to say the least. Connecting the Dots regularly looks to predict things that will happen, and we have at more times than not made the right call. However when it comes to making predictions about the economy, it is much more difficult. There are countless factors that must be considered from virtually every imaginable place. There are also some things that can’t be predicted such as an earthquake or hurricane that can start a ripple effect on the economy.
So this calling of Alan Greenspan onto the carpet was just the start of the hunt for a scapegoat. Without looking to defend or condemn Alan Greenspan, Connecting the Dots looks at a bigger picture. For forty years the economy has been more or less predictable, and for 40 years Alan Greenspan considered that as a norm. But like the 100 year flood that goes past anyone’s memory, it does come. When it comes the forty year norm goes out the window and people look to assign blame for not considering the 100 year flood. So when the 500 year flood comes, the same blame cycle will also happen for not considering that flood. In this case the flood was the rapidly rising and extreme price of oil that quite literally broke the bank.
As mention in other posts the economy was not able to assimilate the rapid rise in energy costs, and luxury items quicky stopped being purchased, and even the necessity items were put on the careful consideration list. Steak was replaced with less expensive foods and so on.
The generally unregulated banking Greenspan felt comfortable with was essentially like a model of nature if you stop and think about it. Consider that natures population control is tied to food. When the food is in short supply, populations go down. So if the free banking practices started to slowly sense a problem, there would be self adjustment by tightening credit. However if there was any mistake Greenspan made, it was not to consider the potential rapid rise in energy costs.
The jump in the price of oil was not totally unexpected, and the predictions go back at least 8 to 10 years this would happen. But now looking a bit deeper, the same sheep mentality seems to have found it’s way to oil pricing and panic price setting was clearly a factor. With just the thought some oil supply would be hindered the price would jump even if the problem never materialized. So this panic driven fear together with the sheep mentality played a significant roll in making things unpredictable as factors moved from reality to imagination. The fact that the price of oil halved in a few months is testimony to the sheep mentality.
The forward thinking now by example is the price of oil will eventually go up again and beyond $147.00 per barrel, and the economy must be shielded from that. The quality of shielding depends on who is the next occupant of the Oval office. The future must be moving away from oil dependency and to other renewable energy sources, and not looking for new places to drill to keep that status quo.
So now that brings us to that unspoken truth that everyone is so afraid to admit. The power of the world is not based in Washington DC, it is not in Beijing or Moscow. The super powers in the world are not as they seem. The power of the world is with the OPEC Ministers, and they truly do control the power. If there is no fuel to launch those nuclear missiles, they do little good sitting in silos in the middle of Nebraska or wherever they are. So to admit that the countries strength lies with a small group of men who are not Americans is very difficult to admit and is never openly talked about. It is one of those read between the lines things. So if OPEC got pissed off and stopped oil production, this present economic crisis is only just the sample platter. So looking for a scapegoat to place the blame on for this economic crisis is a form of therapy that involves a placebo.