generalspeaking

Financial Collapse Fall-Outs

While the Muslim world rejoices that the American economy is struggling to keep its financial breathing apparatus above the drenching waves of collapse that has assailed it, claiming the financial meltdown to be a sign from on high that Allah is displeased with an enemy of Islam, their own markets are not faring all that well, either. Along with Europe and much of the rest of the world. All financial markets, internationally, have been swept along on the tidal wave of market collapse.

The reason for which has indeed been laid at the doorstep of U.S. financial institutions with their laissez faire attitudes and predatory free-market capitalist system. There's a certain irony there too, in that there has long been internal criticism in North America about the inexorably-rising gap between the wealthy and those struggling to make ends meet. It's ever been thus; the rich getting richer and the poor getting poorer.

And here is the latter-day phenomenon of Americans believing that acquisition and ownership of costly quality products like houses and multiple vehicles and electronic toys, is available for all. That somehow, through some miracle of wishing hard enough, people whose incomes are insufficient to provide a bare subsistence life-style can still afford to purchase their own homes. The celebrated American dream, elusive for so many, finally come true.

The enablers of that encouragement to take what you cannot afford, fell under the magic spell themselves, never thinking of a day of reckoning, while they were handing out worthless papers with inadequate capitalization, to trusting markets all over the world. But everyone was convinced they were making good money on these worthless papers, from Realtors all the way up to money managers and financial moguls raking in bonuses for high reward.

Now the world waits with bated breath for the bottom to hit the stock market and housing prices. And while it is true that the problems began with the U.S. financial system, under the unwary auspices of their unregulated banks and hand-over-fist greed, the world of Islam, despite its Koranic lessons against usury, has earned itself troubled times as well.

And nowhere can that unhappy situation of collapsed economies be viewed as more deserving than in Iran. That baleful, boastful theocracy awaiting the spiritual rescue of Armageddon, while tossing bellicose existential threats at their Zionist-entity neighbour, so despised that the name Israel is deemed blasphemous beyond redemption.

While oil prices were floating sky-high on the reality of emerging economic giants' increased needs, and countries like Russia, Iran, the Oil Emirates, Sudan and Venezuela were cashing in on the bonanza, they all with rare exception, swaggered on the world stage, and behaved like cranky, belligerent adolescents whose societally immature stance and damning human rights understanding left them few admirers.

The near collapse of the global financial system has led in part to a slowdown in energy acquisition. The excited international need for fossil fuels has been dramatically reduced, resulting in a sluggish oil market, a huge drop in the price of oil, and an ever-growing glut. At the much-reduced price per barrel of oil, now reduced to half of what it was a mere month earlier, Saudi Arabia is doing all right, as are its Gulf neighbours.

Russia and Venezuela have seen a sag in their coffers, and that will certainly spell trouble for Hugo Chavez, and his swaggering rhetoric, putting out the fires of discontent from disadvantaged Venezuelans. But it's Iran, with its far more slender margin of profitability from its oil fields, that is seeing hard times in its near future. Which appears to have given Mahmoud Ahmadinejad a miserable headache.

One he's had to nurse in private, excusing himself from public duty, and public view. Just as well, since he's being held in increasingly low regard by the Iranian electorate. That notoriously pompous windbag who so much revels in the 'myth' of the Holocaust and his promise to "wipe" Israel "from the pages of history", may be in for a permanent bout of sickness, threatening to remove him from the world scene.

He will not be missed. It's said that whenever the price of oil falls by a dollar a barrel, Iran's losses amount to roughly $1-billion. The country is hugely dependent on its sales of crude oil. It has never developed refining capacity. The country did acquire huge profits in its treasury. A huge amount of which was diverted by its ruling theocratic elite and its hyper-active president to a nuclear agenda.

It would have been too wasteful to squander the country's resources on raising the prospects of its citizens' living standards. Taking the initiative to diversify, to encourage entrepreneurial and small-business enterprise, to increase employment, to raise the expectations to invest for future independence from oil for that time when there would be no more.

He's in, it would appear, bad odour with the ruling elite, with the politicians, with the important merchant class, with the average person on the street. That might make anyone of his ambitious and egotistical ilk ill. So ill, alas, he may be forced to stand down.

There may be hope for the country, after all.

Labels: Middle East, Troublespots, World Crises

posted by Pieface @ Sunday, October 26, 2008