...And again tying into RL Christie's eye to the trends

In arguing for a Watergate style demise for the current administration, Mr. Christie synthesizes some of the same above-mentioned trends:

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...a "greater depression" [will be] caused by the declining dollar and high interest rates required to finance
our federal budget and trade account deficits, if the deficit is institutionalized by Bush's making his tax cuts "permanent" as one of his promised second administration priority acts with his lapdog Republican Congress; and by the continuing dollar and blood drain in Afghanistan and Iraq.

China is the key to the whole scenario. They have beaucoup American dollars from their trade surplus with the U.S. They are already bidding for world petroleum production, and will shortly be bidding for grain production.

The Chinese food reserves are almost exhausted and production is now permanently below grain consumption in that nation and will get worse because of aquifer depletion and loss of farmland to erosion and development. Lester Brown has shown that China will have to buy the entire world grain surplus in a couple of years to prevent massive starvation and
consequent social and economic upheaval - and they have the money to spend to do it. Currently, wheat price futures are up 23% from a year ago. Consider that the average American household spends 10% of gross household
income on food, while the average European household spends about 30-40%. Imagine the effect on the average debt-ridden American household's discretionary spending from a rise in food prices which consumed a larger percentage of household income, as reflected in sales of real estate, autos, goods and services.

Chinese imports of petroleum increased 30% last year, and is projected to increase by the same amount this year. Total oil consumption in China increased 10% in 2003. There is no world production capacity surplus - the last assessment I saw had a 1.5% production margin over demand if the total world oil infrastructure was running "wide open." China will have to fuel their economy from 2005 onward by outbidding other nations for oil that is currently being produced and consumed. The iron law of economics: demand increases, supply doesn't, prices go up. It is now accepted that each $10 increase in the price of a barrel of crude oil lowers the U.S. Gross Domestic Product growth rate by 0.6%.

This leads to my specific prediction: within two years, the price of food and petroleum will rise sufficiently to choke off U.S. economic growth by themselves because food and fuel would consume a larger percentage of household income and raise the price of all goods which have to be shipped. The world investment community will demand junk bond rates for our junk bond securities, as Alan Greenspan just predicted in an address to bankers in Germany. Interest rates will soar, depressing our economy. Iraq will prove to be a bloody, expensive quagmire we can't afford to walk away from as long as the place would become a Waahabist Muslim fundmentalist theocracy and terrorist sponsor state fueled by the world's second largest oil reserves - the Taliban's Afghanistan on steroids - if we pulled out. Bush will be forced to reinstitute the draft to provide enough roadside bomb fodder for the Middle East. The various special prosecutions and investigations the administration managed to stiff-arm into quiescence until November 2 was passed will re-emerge. A number of the key Bush administration figures that didn't have the sense to bail along with Colin Powell will end up being indicted, one by one, just as Nixon's staff was over Watergate. But this time, many of the crimes involved carry a mandatory death penalty (e.g., high treason).
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