Looking Forward to 2012 - Global Economic Crisis Chapter Two

Even the most optimistic view of 2012 gives us a continuation of 2011. Europe remains in crisis, the US staggers along, China continues to skirt crisis. But things could get much more interesting. As Europe follows its suicidal path of austerity, the economy continues its decline. Some countries such as Italy, Spain and Portugal could follow Greece into defacto default. The virtual collapse of Europe will send a shock wave across the Atlantic, furthering the wrecking of the US economy. With a lower demand from the US and Europe, China and India will go into crisis. Brazil, one of the global powerhouses in 2010 is already having a downturn, which will be exacerbated by these events. Russia. So dependent on the oil and gas exports, the demand for which will be cut back will face serious problems. This will be Global Crisis Chapter Two.

Smug, self-satisfied Canada will not be immune. Demand for petroleum and minerals has kept the Canadian economy afloat. With global demand down, Canada will feel the economic crisis. Over the past two years, oil has ranged between 80 and 100 dollars a barrel. It takes at least $70 a barrel to make tar sand oil profitable. (If you ignore both the billions in government subsidies and the cost to the environment) The onset of the 2008 crisis saw oil at less than $60 and there were long faces in the tar pits. Furthermore, Canada has a housing bubble. Dwellings are overpriced by at least 30%, prices are already falling. Pull the plug on the economy and the real estate ponzi scheme collapses like a house of cards.

Then there are the political ramifications. We have not heard the last from the Greeks. The working class of Southern Europe is combative. Occupy, the Arab Spring, the Indignados of 2011, may well be only the first wave of revolt that will actually challenge the system at its roots. Political unrest will further undermine the European economy. The establishment political parties – and this includes the ostensibly left wing parties – are intellectually and morally bankrupt. They have no answers or solutions.

While the majority of the population oppose austerity and the bankster bailouts, the opposition still has no coherent direction or program. This is to be expected as the people are on their own and are have their own learning curve. However, should the people unite around a program that challenges neoliberalism and the corporate state – and this may well not be in the cards for 2012 – revolutionary changes may be in the offing in Southern Europe.

The Middle East will also be crucial in 2012. Though Islamist parties seem to have profited from the revolutions in Egypt, Tunisia and Libya, they have no answers to the problems afflicting these countries. The working class is organizing and revolutionary socialist and anarchist ideas are spreading. We have not heard the last from the Arab Spring. Should the Americans prove foolish enough to attack Iran this year, this could flatten the world economy. While "cheap oil" is a problem for the producer countries, overpriced oil is a disaster for the rest. Close the Gulf of Hormuz and hello $300 a barrel oil and good bye global economy. And one must never underestimate the arrogance and racist-based stupidity of the US ruling class.

There are a host of other questions. What will happen in Iraq? Will the country implode and Iraqi oil production – already low compared to pre-US invasion – drop? Pakistan? Don't even go there! Russia? The left is rebuilding after the virtually genocidal restoration of capitalism and strongman Putin is beginning to look weak. Mexico? Will the people finally have enough of their US-backed narco-terrorist regime and rise up?

A Happy New Year to all!