Streets of Fire

"The financial crisis in 2008 didn't stop the practice of economic management by printing money. Burning streets will.”

Andy Xie of Rosetta Stone Advisors, has written a particularly pessimistic piece of what the near economic future holds. He starts by making the case that North Africa unrest that has spilled over into the Middle East was touched off by economic issues like unemployment and rising prices. He ends by saying it could spread to Europe and the US.

In 2009, 14.3 percent Americans lived in poverty, according to the U.S. Census. Including ones that have given up on looking for a job, one sixth of American workers are underemployed or unemployed.

A huge chunk of American people have no cushion against massive increases in the cost of food and energy. In addition, the prices of imported consumer goods that low income Americans depend on are rising and are likely to rise much more, later in the year. Fifty million Americans are not so different from Egyptians in their economic plight. Riots could come to American cities.  (Hot Money, Fast Riots)

Here's a good explanation of the effects of inflation...

Inflation is redistributive, usually unfairly. First, low income people tend not to have debt, because they are usually not qualified to borrow from banks. When inflation surges, as it is happening now, their bank deposits erode in real value. Where do their losses go? The people who have debt and real assets like property speculators gain the same amount. Inflation essentially robs the poor and gives to the rich.

Second, low income people tend to have insecure jobs and cannot bargain wages up along with inflation, especially when inflation surges like now. The reduced purchasing power for their wages pushes them into an unsustainable situation. They simply cannot make ends meet. (Hot Money, Fast Riots)

Paul B. Farrell, pessimistic liberal investor, wonders when the revolution will start...

Only a revolution will stop Wall Street’s self-destructive capitalism. And watching the people revolt against dictators like Mubarak and Gadhafi reminds us of the spirit that sparked America’s revolution in 1776.

Economist Peter Morici: “Capitalism is broken, America’s government is two bankrupt political parties bankrupting the country.”

BusinessWeek recently asked analyst Mary Meeker to run the numbers. How bad is it? America really is bankrupt, with a “net worth of a negative $44 trillion.” Bankrupt. (Paul B. Farrell)

Farrell laments that it is too late to frog march the Wall Street banksters off to the slammer.  Our corrupt political class lacks the will (and credibility) to do it anyway; they were co-conspirators. But he lists four factors that could cause a revolutionary explosion right here in the US of A:

Wealth gap, Wall Street immorality, Wars, World Population Explosion

The NY-DC Axis of Evil is raping and robbing us.  When will we have enough?