TEN MANIFESTATIONS OF THE GLOOM AND DOOM THAT PERVADES OUR WORLD

7/30/14

Lest you have been enjoying your summer too much, here are some reasons to justify the gloom and doom approach to the world that characterizes many sage observers, including yours truly. Some of these have been very much in the headlines, some have been buried in the bowels of the news.  They are listed in no particular order:

1. The heat is being turned up on the Russians under the theory that we should have a bigger say concerning what happens on its borders than should Russia.  The Russians, and their leader, Vladimir Putin, are being backed into a corner with this newest round of economic and financial sanctions.  The major impact of these shrewd diplomatic moves has been to enhance Mr. Putin’s popularity at home (All governments, and especially authoritarian governments, like that of Mr. Putin, find foreign crises useful in rallying support among their populaces.) and to increasingly make the Russians see the entire Ukraine situation as evolving into a fight not for Ukraine but for Russia itself.   What could the consequences be?   One can think of many, but none of them is good.

2. The Israelis and the Palestinians in Gaza (for now) continue to go at it, with Hamas militants continuing to dig tunnels for sorties against Israeli civilians and military personnel and Israel bearing down militarily on Hamas military strongholds with predictable consequences for the civilian populations of Gaza.  Yesterday, the Israelis knocked out the only power plant on the Gaza Strip, eliminating electricity and water service for the entire area.   The situation is getting more desperate and the conflict threatens to spread at least to the West Bank and probably beyond.

3. An ebola outbreak is spreading through West Africa, having already claimed thousands of lives and probably destined to kill many more.

4. Western states in the Colorado River valley are tapping into groundwater at unprecedented rates.  Already, ground water levels are dangerously low and Lake Mead is at its lowest levels since it was built in the ‘30s.   Meanwhile, larges sections of California remain mired in drought.

5. Farm prices are down sharply, with December corn trading at $3.70 per bushel as I write this, far below the $4.00 widely regarded as the breakeven price for farmers who raise this most vital commodity.   That $4.00, of course, is a nebulous number and varies from farm to farm, but it’s still a pretty good indicator of the shape of farm finances…currently not good.   Not only does this hurt farm incomes, which would a bad enough outcome, but weakness in farm incomes quickly ripples throughout the entire agricultural economy…ag equipment manufacturers, seed and fertilizer companies, rural banks, etc.  And sometimes, but not always, weakness on the farm is a precursor of general economic malaise.

6. According to USA Today (not a good source, I know), one-third of Americans have debt in collection.  So much for Americans’ cleaning up their balance sheets; we just can’t stop spending money we don’t have for things we don’t need to impress people we don’t like.  This is not a formula for economic success, as much as the learned observers in the financial media cheer every indication of increased spending and lament every indication of financial prudence on the part of the American consumer.

7. There seem to be the makings of a shake-up in China’s leadership as Zhou Yongkang, former domestic security chief (a BIG job in China) comes under investigation for “serious disciplinary violations.”   China is a big, important place; what happens in China doesn’t stay in China any more.

8. The United States is seemingly under invasion by legions of illegal immigrants from Central America and doesn’t seem to know what to do with these new arrivals.   Our sense of humanity paralyzes us, perhaps understandably, making us a helpless giant in the face of this wave of new arrivals.

9. The Islamic State (“TIS”), a Sunni group I have described as Al Qaeda on steroids, continues to press for a caliphate spreading from Lebanon to the Iraq’s border with Iran.  Alawite (a branch of the Shia branch of Islam) President Bashar Assad continues fighting with Sunni rebels, including the TIS, in his country.  The United States is on both sides of this growing religious war that threatens to engulf the Middle East, supporting TIS in Syria and supporting the Iraqi government in its battle with TIS.

10. Terrorist attacks continue incessantly in China’s Xinjiang Province.  The Chinese government fights back with increasing, and understandable, ferocity.   Again, China is a big, important place; what happens in China doesn’t stay in China any more.

Yours truly does not make these observations in his occasional role as a financial/economic/stock market observer; our economy, if you believe the numbers, grew at a 4% pace in the second quarter and nothing seems to make this stock market go down.   I simply offer these trouble spots in my usual role as a curmudgeonly commentator who manages to find the cloud inside every silver lining.

There are several possible reactions to the above list of troubling developments.  One is to point out that things have looked bad at many points in history; 1929, 1933, 1940, and 1968 come immediately to mind as recent examples of low points on the world’s timeline.  And the world somehow survived and eventually prospered.  Another reaction is to say something like “This time it’s different” and conclude that the world runs inexorably and speedily toward hell in a hand basket.   While, given my general downbeat approach to life, I favor the latter, history teaches us that the former approach will not only probably prove more beneficial, both personally and generally, but will probably prove correct.  We somehow will get out of this…I suppose.

Meanwhile, yours truly continues to pray for another Great Awakening, this time on a worldwide scale.  This seems to be the only development that would save our nation, and the world, from the generalized suicide it seems bent on committing.