Americans are all giddy about the drop in gas prices because they can’t see economic logic beyond the shadow of its immediate effect on their wallets. Little do they know that much of the nearly 1.2 quadrillion dollars of dodgy derivatives, the liability for which Citigroup masterfully managed to dump on American taxpayers and depositors recently, are riding on high oil prices, which have tanked and look as though they will remain that way for the foreseeable future. It’s almost certain that oil derivatives are soon to follow.
Americans are oil-wise and dollar-foolish. For the few nickels they save at the gas tank, today, and the petty pleasure they derive from gloating over Russia’s economic pain, Americans stand to lose hundreds of trillions, from their bank accounts, investments, and tax revenue, tomorrow. It is just this unparalleled brilliance that has gotten Americans where they are now – up a creek, without a paddle, and blissfully headed down the drain.
Don’t believe me? Former assistant Treasury Secretary, Dr. Paul Craig Roberts puts it this way:
“We know something serious is wrong. The only provision of Dodd-Frank that has any teeth is the provision that says if the big banks are going to be casinos and gamble on derivatives, they cannot do that in the depository institution where depositors have their accounts. They have to farm it out into subsidiaries. So, if the subsidiaries get into trouble, the subsidiaries have no access to depositor’s money. This is the only real reform part of Dodd-Frank. Citigroup got put into the recent spending bill, the repeal of this, so banks can gamble on derivatives, and taxpayers and depositors are on the hook for the losses. Why would you do that unless you had a lot of derivatives trouble. It could easily be the oil derivatives. . . . The banks can gamble all they want and they are covered by the FDIC, which has no money. . . . This gives the banks access to depositor’s money. . . . This is sick, and it shows the United States government is the most corrupt government on earth, far more corrupt than Russia or China.”
Moreover, as Dr. Roberts so astutely points out, Russia’s economy is far better off than America’s and anyone who thinks otherwise is living in neo-liberal la-la land. If Russia were to wake up today and take serious measures to protect itself and its domestic economy, it will bring the whole western financial establishment to heel at the alter of reality.
So, the US and its crazy neo-con central bankers better put down that gun, before they shoot themselves and their countrymen in the head.