Surviving Capitalism (Not) : Oil Price War Throws the Fed into Crisis Mode

We’ve lived so long under the spell of hierarchy—from god-kings to feudal lords to party bosses—that only recently have we awakened to see not only that “regular” citizens have the capacity for self-governance, but that without their engagement our huge global crises cannot be addressed. The changes needed for human society simply to survive, let alone thrive, are so profound that the only way we will move toward them is if we ourselves, regular citizens, feel meaningful ownership of solutions through direct engagement. Our problems are too big, interrelated, and pervasive to yield to directives from on high.
—Frances Moore Lappé, excerpt from Time for Progressives to Grow Up

Tuesday, October 14, 2014

Oil Price War Throws the Fed into Crisis Mode

Click here to access article by Pam Martens and Russ Martens from Wall Street on Parade.

So many mysterious things are happening that portend various disasters for the world's Ninety-Nine Percent that it is hard sometimes to understand what is going on in the larger picture. Where others see a the dumping of cheap Saudi oil in the market as evidence of Saudi collusion with Empire directors to undermine the Russians, or as Saudi efforts to undermine US fossil fuel independence, the Martens see this as simply evidence of the growing threat of worldwide deflation.

A key component that has allowed both the Fed and Congress to keep from taking strong measures to address a looming deflation has been the price of crude oil. Because oil impacts everything from transportation costs that inflate the price of food and other products to the cost of an airline ticket or heating a home, the high price of this commodity has, to a degree, masked the growing deflation threat.

Now the mask has been removed. Oil prices are in freefall and an oil price war has broken out among OPEC members, raising the specter of 1986 when oil prices fell by 50 percent in just an eight month span.

Iran also plays in this scenario. Read my other post in today's offering.

I certainly don't have the answer, but I tend toward the first explanation. In any event, the world scene looks more dangerous than ever for us in the Ninety-Nine Percent.