Tipping Points For 2007

Last year, over a period of several days, I covered some of the possible tipping points that could have sent our economy reeling. As I mentioned last year, they were "possible" tipping points. As it turned out we pretty well dodged all of them and the economy chugged along and everything seemed for the most part peachy.

This year, as I look ahead, I see some of the same tipping points, or if you prefer tripping points as they could trip up our economy and cause us to slide into recession…or worse.

Two of the tipping points discussed last January were Peak Oil and Government Ethics. Now to be sure, the ethics issues revolving around President Bush and his snooping on innocent Americans kind of faded away. I don't see them popping up again for the simple reason that there is no one in government that has the stomach to take on Bush and his machine.

Peak Oil is still with us and will always be with us. While you will not get a government official to admit to peak oil, I believe that it is what drives our foreign policy. Someone at the top has decided that we as a country are not going to be left holding the bag with regards to oil. We are going to control as much of the world's remaining supply as possible. This strategy, instead of a more reasoned strategy of developing alternative sources of energy, forces us to become an empire builder and we know from history what happens to empires, they crumble and fail.

Our desire to control oil has us mired down in Afghanistan and Iraq. We are not fighting a war on terror no matter what the president says, we are fighting a resource war and will continue to do so. Iran is also about resources and our control over as much of the remaining resources as possible. It is NOT about nuclear weapons. I know that nuclear weapons are the story line right now, just as terror was and continues to be elsewhere, but look at the facts. There are other countries that have developed and currently have nuclear weapons and we are not barking at them like a rabid dog.

No, the nuclear ploy is just that, a ploy to distract the public and possibly the world from our true intentions…oil.

Now when you lay it all out, it is obvious that this oil thing seems to be important. It seems to be driving everything we do, right up to sending our kids into a raging civil war that we cannot win. I think the old saying, "watch what they do and not what they say" is especially important right now. There may be something to this peak oil thing. I have commented at length in the past about what it would be like in this country if gas goes over $5.00 a gallon. Imagine then if it becomes unavailable to you and I because of the governments needs it for strategic resources.

I say all of that to say this. I do not believe that Peak Oil itself will become a tipping point in 2007; however, the behaviors of our leaders because of Peak Oil could be the tipping point.

Think Iran.

I have noticed that lately, the press has reported that the government is turning up the heat on Iran. Here are just a few of the recent stories:

·The US is trying to kill oil/gas developments in Iran.
·The US is pressuring banksters not to do dollar deals with Iran.
·The US is accusing Iran of exporting missile technology to North Korea.
·And the US is warning China about doing a $6-billion deal with Iran on gas development.
·And we read stories that Iran is training al Qaida fighters.

This sounds an awful lot like what the US did to Japan back in 1939 and 1940 to draw them into a war with the US. Go to Wikpedia and read about the pressure we put on Japan.

"July, 1939: The United States announces its withdrawal from its commercial treaty with Japan."

August 1941: The United States, which at the time supplied 80% of Japanese oil imports, initiates a complete oil embargo. This threatens to cripple both the Japanese economy and military strength once the strategic reserves run dry, unless alternative oil-sources can be found. "

I believe that the current administration know that they cannot fire the first shot on Iran, but if we push Iran into firing the first shot, then we can go in with our bunker-buster nukes ablazing. Notice the similarities between Iran and Japan? Scary eh?

A shooting war with Iran would tip the economy into recession or worse. Oil prices would skyrocket and things would fall apart. Not a pretty thought.

Speaking of recession, we do not even need to get this drastic in order to experience a good old-fashioned recession. The yield curve has been negative for some time now and based on historical data there is now a better than 50% chance that we will see a recession starting sometime in 2007.

You know what recessions cause right? Unemployment, foreclosures, bankruptcies, and a drop in the stock market. I hope you have your financial house in order so that you can weather the coming financial storm. If you haven't already read my article titled, "Five Things You Must Do Know to Protect Your Investments," get it today by sending a blank email to investoralert@freefollowup.com.