Tags: dollar | Russia | capitalism | communism

Is Communism Resurging as Capitalism Fails?

By    |   Wednesday, 30 Apr 2014 08:13 AM

Capitalism Is Dying!

Is Capitalism Doomed?

The cacophony of such headlines adorn the media from the esteemed Economist magazine (my favorite) to several intellectual readers I follow. I have questioned the efficacy of capitalism in the past several years, as I feel that time and circumstances have subverted what was possibly a sound economic principle to the tattered and convoluted system we see today.

Capitalism has been so infected with cronyism that it has lost meaning. The rich have gotten richer in the past few decades, as they have bought influence in the power circles to help them prosper even more. The gap between the rich and the poor has never been as wide as it is now.

From the largest democracy exercise in India to the current crisis in Ukraine and Russia, crony capitalism is everywhere.

In India, we are seeing the largest democracy carry out its valiant exercise where over 600 million people are exercising their right to elect a government. It is turning out to be a referendum on the past decade of cronyism that was exercised there.

Over in Ukraine, the oligarchical powers that supported and ran Ukraine in cahoots with Russia are now being ousted, but being replaced directly by Russia, which is fully dominated by cronyism.

Back at home, we have not been very far from disguised cronyism ourselves. Instead of oligarchs, we have the all-powerful CEOs of global business conglomerates who have twisted the tax code beyond recognition in order to suit their needs. In addition, the power wielded by such powerful lobbies such as the National Rifle Association, automotive, oil and gas, farm and agriculture lobbies are stripping away billions of dollars.

Let's not forget the increasingly wasteful and inefficient ways of our government spending. Adding to that heady mix is the geopolitical swinging shifts of power that are creating several hotspots around the world.

As a result, we have a serious challenge to capitalism, one that may prove fatal in the near term.

On one front we have China, which has been challenging the United States politically. It has been chipping away at the U.S. dollar's reserve status for the past seven years. China has increasingly flexed its political muscle all over the Asian region.

On the other front, we have decided to pick a fight directly with Russia now.

The United States has announced further sanctions on Russia. Russia has warned that it wants to retaliate by removing the U.S. dollar from its trade in oil and gas. The double body blow will really knock the stuffing out of the dollar if Russia carries out its threat.

Given this environment of challenges to the U.S. dollar, as well as the strangulation of capitalism all over the world, I wonder if the United States will continue to decline in importance as a global trade house while we see the resurgence of various hybrid models of economic systems around the world.

China has a hybrid capitalistic/socialistic business model while practicing communism. Russia is flirting with democracy while it retains communistic tendencies. In India, we are seeing the resurgence of regionalism and non-secular ways of ruling the populace. In Brazil, democracy may be under threat due to the miserable failures of the democratically elected leadership. U.S. growth has now stagnated for more than six years. Japan, France, Italy and few other countries also have demographic challenges and growth issue.

It amazes me that in such turbulent times, gold is trading at around $1,300 per ounce. I would have expected it to be soaring above $2,000 an ounce, so it baffles me as to why it is still so low.

My chartist friends tell me that silver will start its ascent later this summer or by fall of this year. While I do not trade by charts, I certainly keep a keen eye on the indicators.

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Advani
Capitalism has been so infected with cronyism that it has lost meaning. The rich have gotten richer in the past few decades, as they have bought influence in the power circles to help them prosper even more. The gap between the rich and the poor has never been as wide as it is now.
dollar, Russia, capitalism, communism
642
2014-13-30
Wednesday, 30 Apr 2014 08:13 AM
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