Good Friday or Bad Friday

I prefer the first option actually, but my fear is that we may get something else. The Russians have announced that the US intends to attack Iran on April 6, 2007. That of course is Good Friday, but if they attack, it will be remembered as Bad Friday.

I remember back before we invaded Iraq. The administration was bad-mouthing Hussein and his regime. Making all kinds of wild claims about Al Qaeda support and weapons of mass destruction, but the real story went unnoticed. The real story was that Hussein had announced that Iraq was planning on accepting payment for their oil in something other than dollars. This pretty well went unreported in the mainstream media, but this was a big deal.

You see, if the oil producing countries stop accepting payment in dollars, then the value of the dollar drops. Exports are no longer cheap and the US economy suffers as a result. The US can no longer sell bonds cheaply on the world markets and we find ourselves unable to finance our extravagant standard of living.

So the invasion of Iraq was two-fold. Gain control of resources (oil) and put a stop to an oil bourse that accepts any other currency except dollars.

Now we read that Iran is requiring payment in currencies other than dollars. Most recently they have asked Japan to switch out of dollars. Thus Iran has fired the first shot in the coming conflict and I bet most people did not even read the story because no one in this country reported it.

The Bush administration is now desperate. You see if the major oil producers stop accepting dollars, then dollars will drop and the price of gasoline will continue to rise. Voters will take their anger out on the current administration. This does not bode well for the Republicans in 2008.

The cards have been dealt and Iran has just raised the bet. The US now must either call or fold. Which choice do you think Bush will pick? He doesn’t seem to be the folding kind of guy to me.

Another Potential Tipping Point For The Economy

As if everything we have going on in the world wasn’t enough, we have yet another area of concern to pay close attention to.

As we have covered in the past, we are now expecting a recession to begin this year. The signs are all there and have been in place since the end of last year. We are almost at 100% certainty.

Additionally we have the subprime mortgage meltdown which contrary to what the media heads are reporting is just beginning. Expect this contagion to spread to conventional mortgage providers as real estate values drop. Over a year ago, I quoted Sir John Templeton who believes that real estate prices will fall by better than 70%.

While it is possible if the recession becomes something worse, I do believe that real estate prices could drop 30% in certain parts of the country.

We also have the mess in the Middle East and various sources on the Internet claiming that we will see some sort of military strike on Iran in the next 7-10 days. We have already seen gas prices moving up in anticipation of this possibility. If this attack occurs, oil will go over $100.

But these are the things that we know. Now I am hearing about some sort of disease that is affecting bee colonies. Entire hives have been wiped out and now the UK’s Telegraph is warning that flower and fruit harvests are going to be devastated in Europe because of lack of pollinators.

There have been reports of hives dying off here in the US as well. This could have an effect on food prices as this problem becomes more widespread. Here at the house, I noticed we still have bees buzzing our fruit trees this weekend so the problem will not affect us this year, but the crazy thing about tipping points is that many times, the event is not recognized as a tipping point until well after the event occurs.

2007 is shaping up to be a very interesting year. Keep your ear to the ground and keep your pantry stocked. The last thing you want to do is fight a crowd at the local Wally World when TSHTF.