George Soros, the billionaire financier, has rounded on institutional investors who have been ploughing money into oil, saying they are following a "craze" that is inflating a commodities bubble and harming the global economy. And he predicted that the rise of index funds that allow retail investors to bet on the oil price could lead to a crash that destabilises more than just the commodities markets. Mr Soros was called to give evidence on Capitol Hill as US lawmakers investigated whether "speculators" were manipulating or otherwise influencing the price of oil, which has doubled and doubled again in the past five years. A 25 per cent spike since the start of the year has sent petrol above $4 a gallon in many US states and sent the issue to the top of the political agenda. ...   more »

... The state capitalism embraced by Vladimir Lenin and carried forward today under Prime Minister Vladimir Putin, has immunized itself against the machinations of financiers and the collapse of the dollar. Russia is preparing for an economic storm. Capitalism contains, within itself, the germs of its own destruction. The dollar has become a paper currency and the collapse of the dollar is therefore inevitable. This collapse may not happen today or tomorrow; but one day, it will happen. The fever of financial crisis has already raised our collective temperature. Real estate values are falling. The stock market cannot remain high. There is a banking crisis, a credit crunch, an energy crunch and more. An economic unraveling has begun. Once this process becomes full blown the unity of the Western world will be undermined. The free world will become unstable. Demagogues will rise to power. Violent political passions will be engendered. Russia will be powerful again. 

The president of the Federal Reserve Bank of Philadelphia, Charles Plosser, has warned that attempts to stabilize the banking system are distorting markets and preventing asset price corrections. Worse yet, financial stabilization policies “subsidize risk-taking” by leading financial institutions.” Such policies, says Plosser, risk systemic instability through the promotion of moral hazard.

The whole financial system has become an exercise in moral hazard: massive indebtedness, consumption on credit, out-of-control social entitlement programs, protections for investors, corporate bailouts and the greatest moral hazard of all – our fiat currency... 

According to economist and Nobel laureate Robert Mundell, the U.S. dollar is headed for a major crisis. “I see the problem coming maybe in the next recession,” he explained. Credited as one of the “intellectual fathers” of the single European currency, Mundell is presently advising the Communist Chinese. “The swings in the dollar–euro exchange rate are big problems,” he noted, “and the problem is exacerbated by the fact that the Americans get the benefit of these swings and Europe gets the wrong end of the stick.” ...

Perhaps the day is coming when oil-producing countries won’t accept dollars in exchange for oil. Perhaps they’ll want real money instead of paper. Behind the “new financial instruments” intended to save the banks we find paper. Behind the paper we find the dollar. That is to say, more paper. The U.S. Constitution is also made of paper. What previously backed all this paper was character; a willingness to work hard and accept pain – as well as painful truths. ...

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Work hard, play by the rules and tomorrow will be better than today. That implicit promise has been at the core of the American Experience through good times and bad. -- But now, whipsawed by plummeting home values, $4-a-gallon gas, rising food prices and gyrating financial markets, Americans increasingly fear that the national bargain has unraveled, that their once-steady march toward affluence has derailed. In a new USA TODAY poll, 54% of those surveyed say their standard of living is no better today than five years ago.

"Fewer Americans now than at any time in the last half century believe they're moving forward in life," concluded a recent report by the Washington, D.C.-based Pew Research Center. -- The USA TODAY respondents were more upbeat about the prospects for improvement in the next five years, but only 45% expect their children to live better than they do...

So is the American Dream dead? Well, it's at least wounded. ...   more »

As the mortgage and financial crisis continues to notch more victims, the question on many economists' minds is not whether a recession will happen, but how deep it will get and how long it will last. But one prominent voice thinks the high-flying finance industry isn't going to bounce back -- and that we'll need to look elsewhere to set the U.S. economy back on firm footing.

Eric Janszen is an angel investor and founder of the contrarian market website iTulip.com, which The New York Times credited with "accurately predicting that the [internet] bubble would pop." Now Janszen believes the American economy needs a fundamental restructuring away from its foundations in finance, insurance and real estate. His prescription: a new bubble based on green technologies. In a widely discussed Harper's article in February, "The Next Bubble: Priming the Markets for Tomorrow's Crash," Janszen argued that clean tech is the only sector that could create enough "fictitious value" to replace the losses from the housing bubble, if only temporarily. ...   more »

...We need another wealth-generating economic bubble. And that, said Novogratz, must come -- can only come -- from new energy sources and green technology.

"As the price of oil goes up, there's got to be a green revolution. I think of what will be the next driver of the American economy, and it's green energy. That's a huge growth opportunity. It's not about the pollution. It's about the energy. Gas will go to $10 a gallon," he said. ...   more »

The oil age began in 1860. By 2006 the world¹s oil rigs pumped oil at a rate of 85 million barrels a day. They haven¹t come close since, even as prices have risen to more than $100 per barrel. -- Breaking our fossil fuel dependency will require plugging into the grid instead of pulling up to the pump. And there are some interesting energy options and others are doing a lot more about developing them than Americans.

Germany leads the world in its installed capacity of renewable energy sources (25 percent), and is the third largest producer of solar panels after China and Japan. -- The share of electricity generated from renewable sources exceeded 14 percent in 2007, an increase from 11 percent in 2006. This means that Germany has already met the European Union¹s target that 12.5 percent of electricity should come from renewable sources by 2010. -- Enercon, a major wind equipment maker, claims that the renewable-energy business will become a major part of the country¹s manufacturing business, alongside cars and machine tools. Employment in the renewables industry is now 250,000 ands expected to double by 2020. Throughout Germany, around 160 technical institutions are doing research on alternative energy. ...   more »

...The transition model emboldens communities to look peak oil and climate change squarely in the eye and unleash the collective genius of their own people to find the answers to this big question: for all those aspects of life that this community needs in order to sustain itself and thrive, how are we going to:

    * significantly rebuild resilience (in response to peak oil)
    * drastically reduce carbon emissions (in response to climate change)?

Typically, self-determined solutions will involve some flavour of relocalisation. -- We're building a range of materials, training courses, events, tools & techniques, resources and a general support capability to help these communities. ... We're hoping that through this work, communities across the UK will unleash their own collective genius and embark on an imaginative and practical range of connected initiatives, leading to a way of life that is more resilient, more fulfilling and more equitable, and that has dramatically lower levels of carbon emissions. ...   more »