Bill Totten's Weblog

Sunday, August 31, 2008

Americans Organize to "Save Starbucks" as the Economy Slips into Recession

by Max Keiser, Huffington Post

AlterNet (July 21 2008)

Citizen groups around the country are mobilizing to save their Starbucks {1} after the company announced it will shut down 600 stores. These people don't realize that Starbucks will have to double or triple their prices as the dollar continues to crash and the reason Starbucks has to close stores is because Americans are too broke to buy "premium" merchandise now that their currency has become the laughing stock of Forex.

Incredibly, and Forex traders can't help but chuckle at this, these citizens are not mobilizing to restore habeas corpus, or to restore the rule of law as it applies to America's spying telephone companies, or restore the checks and balances of the Republic that would prevent the president from declaring himself sole judge and jury in any case against any American who can then be detained for any length of time for any reason - as is now the case with the recent ruling of the US Court of Appeals for the 4th Circuit (not to mention the workers themselves at Starbucks that nobody seems to care about after it was revealed that Starbucks management was stealing the barista's tips {2} ).

No, these citizens are mobilizing to keep the doors open at shops that charge them $4 (soon to be $12) for drinks made from agricultural products (coffee beans) that the company has no, true legal right to exploit without adequate compensation to the indigenous populations that have farmed these products for millennia.

I digress ... my point is that Americans can't afford stuff they used to be able to afford, and they are becoming increasingly alone in this - as compared to other citizens in other countries - due to the falling US dollar and the rise in the value of currencies we compete with.

As a few in the financial press in the US have said (the ones who manage money for a living, not the ones who just talk about money), Americans will be shocked by their loss of purchasing power - as the dollar collapses - versus their compatriots in other countries - whose currency is rising, but by then it will be too late to do anything about it.

We are seeing this play out with Starbucks and their impoverished fans who are trying to keep it open. The plain fact is, most Americans can no longer afford Starbucks. The ingredients used to make these products are beyond the reach of Americans now, just like gas and housing. And this is just the beginning. As current trends relating to the dollar's collapse continue - Starbucks will have to double and triple their prices and close hundreds more stores.

Americans can't see what is staring them in the face.

Tell me again ... I don't think I understand. Why is Starbucks closing 600 restaurants?

For several reasons, all connected to the same underlying problem of America losing its economic sovereignty and the viability of its currency.

The cost of Starbucks raw materials; sugar, coffee, milk, wheat, chocolate are all skyrocketing in price due primarily to the concomitant fall in the US dollar that has forced the price of these commodities, all priced in dollars, sky high.

Additionally, Starbucks, like all fast food franchises is also a real estate operator and the same problems we see in the nation's real estate market we see in Starbucks real estate portfolio as the US real estate market crashes due to a crashing dollar (the Fed keeps trying to bail out the un-bailable banks/mortgage/Fannie Mae crooks by printing more dollars that have the effect of killing the value of the ones in circulation).

Additionally, America's household budgets are getting squeezed at the gas pump. Oil, like other commodities, is also priced in dollars and is going up as the dollar crashes.

Amazingly, the fact that Americans are now being shut out from something they covet because of the irresponsible Fed policies that have wrecked the stock market, housing market and dollar never seems to cross anyone's mind.

It's as if 300 million Americans live in a sno-globe of deceit and raining down on them are trillions of fake snow flake dollars that are destroying their purchasing power, economy and sovereignty and their only thought is to make snow balls, 'have fun' and 'Save Our Starbucks'.

Starbucks is the first, but not the last example of how a falling dollar will make most items that Americans gorge on too expensive for Americans to buy with their crumbling currency.

In a few years time, it is quite possible that Americans, like the Chinese last decade, will be working to keep themselves alive manufacturing products that will be shipped overseas to China; products that they themselves will be unable to afford.




(c) 2008 Huffington Post All rights reserved.

Bill Totten


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