America at the end of WWII produced 60 percent of all the petroleum in the world. In fact, its status as the chief exporter of oil (the United States produced much more than the consumer and war economies needed) was a salient factor in the American victory. Interestingly, at one point the nation produced so much oil and gas that natural gas was “flared” or burned away because it was not economical to transport it. Once, in the lifetime of many Americans, filling stations engaged in “price wars” and sold gas at or near cost to consumers.
Last Friday Laksman Achuthan (left), co-founder of Economic Cycle Research Institute (ECRI), announced that not only has the economy entered a new recession, but that “it’s going to get a lot worse. The vicious cycle is starting where lower sales, lower production, lower employment and lower income [leads] back to lower sales … you haven’t seen anything yet.” Despite some evidence that the economy is growing in places, it’s not enough to overcome the significant array of indicators that Achuthan has used successfully for years to predict the economy. According to The Economist, ECRI has never issued a “false alarm,” and this time should be no different.
On Thursday, Bank of America announced that, starting the first of the year, they would be charging debit card users $5 a month for the privilege as a way to recoup lost income under new rules from the Federal Reserve.
With the announcement from the Commerce Department that the sale of new homes in August fell by 2.3 percent compared to July, the Los Angeles Times took on a decidedly gloomy tone, concluding, “Sales of newly built homes in the U.S. appear to be stuck at the bottom.” The report noted that the August numbers translated into an annual rate of 295,000 sales, which is close to the low of 278,000 recorded in August last year, and down from the 1.3 million new homes sold in 2005.
Our nation stands at the precipice of an economic meltdown that would make the current recession seem like the “best of times.” The almighty dollar, once labeled “good as gold,” stands close to repudiation. Yet the Obama administration and congressional leaders are failing to address the reason for the dollar’s decline.