Taxation or Tumbrels
3 hours ago
Tuesday, October 20, 2015
Round and round we go
They say that the future doesn't repeat itself, but it does rhyme.
It occurred to me recently that Russia might be on a repeat course for what destroyed the USSR. Russia's big problem is that they've been unable to diversify their economy as much as they wanted to. It's still too heavily reliant on oil exports.
Oil prices are depressed at the same time Russia is increasing military spending. That didn't work out well the last time they tried it.
Of course, the US may be doing a pretty good imitation of the Great Depression, so we are not in any position to throw stones.
Things never line up exactly, but business cycles, and politics tend show the same things over and over again. It's the different spins on things that make things interesting.
One thing that people are more concerned about this time around is the total collapse of infrastructure, especially the collapse of the electrical grid. Some of the same people who expect the grid and the Internet to go down are also heavily invested in Bitcoin -an electronic currency. Seems like some sort of disconnect going on there.
Boom and bust cycles have been around at least since the dawn of civilization. That's interesting for historians, but tough for those who have to live history.
-Sixbears
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And have you heard about the Chinese leader? Mad, bad and downright dangerous and scary! I heard he is worse than Mao was..... And the British government have spend weeks liicking arses in China, now the mad man is in London wining and dining with the queen and the politicians are about to sign contracts for the Chinese to build nuclear power stations for England. Among other things apparently. Never mind about the appealing humans rights abuses in China, worse now than ever.let not that get in the way of dodgy business hey!
ReplyDeleteMoney trumps everything. What a crazy world.
DeleteOops appalling, not appealing!
ReplyDeleteDarn that autocorrect!
DeleteI once read that the best trade goods for hard times are whiskey and ammunition. It's probably true.
ReplyDeleteTempted to keep them for myself.
DeleteAnd still we never learn from history...
ReplyDelete. . . so we are doomed to repeat it.
DeleteAnyone heard from Dizzy? I worry when he doesn't blog currently ... and it's been almost a week.
ReplyDeleteSixbears, learning about history doesn't necessarily mean learning from history, does it?
I haven't heard from Dizzy either. I hope he's just too busy doing fun things.
DeleteYou are right, there's a big difference between learning about and learning from.
Hmmmm, wonder if it's time to start stashing beans, rice, sugar, booze, etc.
ReplyDeletePast time. Better get busy.
DeleteInteresting development out of Moscow with a top presidential aid coming up with a plan in case western sanctions don't let up and/or the oil price squeeze continues. Among the possible options, Russia defaulting on its debt, which is mostly corporate as the federal government itself owes relatively little and has been working to pay that off. Recall also that they have been buying up a lot of gold as well.
ReplyDeleteSuch a default would hurt them, true, but would likely crash the whole financial establishment of the west, including ours.
Who would be in better shape to ride it out, a country rich in raw resources and low debt, or one that has burned through most of itsresources, has outsourced most of its manufacturing base, is overextended militarily all over the world and basically broke? I hope the default doesn't happen because if it does we will be hurting a lot more than Russia.
Thought provoking post, Sixbears.
Thanks for your insightful comment William. A tit for tat financial war would be interesting. I don't see any winners here -not in the long run. That could be what brings the whole financial house of cards tumbling down.
Delete