It has been quite a few days since my last entry but I have been pondering the state of the local and global economies of late and, being a natural pessimist/realist I have not really been in the mood to natter away online. Actually, more shockingly still I have not even been online that much lately as matters in my personal life have been also keeping me away from the computer.
I think it would be safe to say at this point that we are heading into a deep economic valley and we can only guess how far we still have to fall. Like an earthquake the frightening thing is that there is no way to hide from it as it is global in scope. As Europe and the US try and pour money into the sinkholes that used to be insurance companies and banks and as at least one US carmaker ( GM) faces the possibility of going out of business it seems that we may really be teetering on the verge of a depression and are just too afraid to admit it.
Here in Trinidad we have started to feel many of the same problems as the more developed world including the need for government intervention into the banking and insurance sector. The giant CL Financial empire has seen its insurance arm CLICO forced to approach the Central Bank for help when it realised it had a serious liquidity problem. Thus far the Central Bank is suggesting that the shortfall may exceed $10 billion and who knows what is going to hit the the economy next as oil and gas prices remain a long way off from their highs last year. There is probably good reason to expect a devaluation of the TT$ sometime after we host the Summit of the Americas. Other than the PM’s urge to show off that he can spend our money I have still not understood why we have spent at least half a billion dollars to host the wretched thing.
It seems that hardship is on the way and, like every other sensible person, I am thinking twice before making any big purchases that I can possibly defer. I know that poor consumer confidence is sure to exacerbate the decline but I am also equally sure that the fundamentals of how we did business are extremely flawed and caution would seem the wise choice.
There are , of course, several possible ways to survive the tough times ahead stocking up on vodka and hunkering down to waft through the crisis in an alcoholic haze springs to mind. Unfortunately, if they devalue the currency any decent vodka will be out of range and the thought of drinking the local plonk would be even more depressing. I guess I will have to fasten my seat-belt and hope the ride is not too bumpy just like everyone else.
As the title of this entry implies I have been suffering from a rather unpleasant bout of the flu for the last couple of days and have not found shivering and headache conducive to blogging. I suspect it took a turn for the worse when I was subjected to watching the PM’s address to the nation on the current financial crisis last night. I swear i felt the aches and pains getting worse as his mouth formed words that made little sense to me.
As we watch economies around the world scramble to hunker down for the fallout of a developing financial meltdown we are being assured that we will be ok. Frankly, the explanations and math are not really working for me. Despite oil and gas being down around 15-20% and presumably VAT receipts likely to fall with a loss of consumer confidence the government thinks cutting out $5.6 billion from their $50 billion budget will be enough. I can only guess that they intend to not put anything into the Heritage Fund since that rainy day has already arrived. The PM says that after painful soul searching they have decided to cut back on building hospitals, new schools and affordable housing. Thank heavens he got his own palatial digs finished in time so he can stay in the lap of comfort. We also seem to still be hosting the Summit of the Americas and the Commonwealth Heads of Government at a cost of millions and there was no mention of the multi-billion dollar transit system being shelved.
The thing that annoys me the most when the PM and his people speak is that they speak of how well they have managed the economy. If they actually believe what they are saying then the state of delusion in government is frightening. Bragging that we now have $2 billion US in the Heritage Fund as if it is an achievement when we could have billions more had they taken a more measured approach to spending our money. But I guess it is all just money under the bridge.
In other news in this part of the world we have basically now hit the 500 homicide mark give or take the odd body or two. Nicholas Laughlin has a marvelously sardonic column on the matter in his blog. As I have said before the fact the the Nat. Security Minister is incompetent and ineffectual is not really shocking such things happen – the truly shocking thing is that he has not had the shame to step down after failing so ostensibly and more shockingly the PM keeps him in the position. I suppose it is easy to not worry about being killed when you are surrounded by security at all times and driven to work in a motorcade. Little or anything effective is being done about the crime situation and those that say it is not the government committing the crimes seem to forget that they are spending billions of our money to allegedly protect us. What has this resulted in? Well, in one shining example, my friend Peter S saw prowlers outside his apartment last night and called 999 telling them he was fearing for his life and they were right outside his door. He has yet to see a police vehicle show up at his place and he lives in Port of Spain. That, to me, is not just shameful it is simply scandalous.