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Starbucks and America's First Taste of the Greater Depression
Citizen groups around the country are mobilizing to save their Starbucks 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).
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 U.S. dollar and the rise in the value of currencies we compete with.
As a few in the financial press in the U.S. 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 U.S. dollar that has forced the price of these commodities, all priced in dollars, sky high.
Additionally, Starbucks, like all fast food outlets 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 U.S. 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 snoglobe 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.
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Voting Republican has consequences.
As I pointed out in another Starbucks thread, you can get your lattes for free by shorting the current share price (around $14) and covering when the price reaches single digits which is where it's heading.
The Great Depression was actually caused by a decline in the money supply.
So far, we don't know if that will be the case this time.
The collapse of the derivatives is destroying a lot of money, but they are also creating a lot. That's why they call Bernacke "Helicopter Bob."
A decline in the money supply means there is not enough money to purchase items. The Fed knowingly printed too much money. Ironically, too much money that dropped in value to where there is not enough value in the dollar to purchase as much.
The banks wouldn't loan during the last depression. That is the reason FDR created Fannie Mae, so the people could borrow money for mortgages.
Another FDR New Deal is biting the dust.
Starbucks is also suffering from old-fashioned over-expansion.
World population will decline to the point where humanity can live off our solar income.
There are 4 ways to control population: birth control, famine, war, and disease.
Our collective decision has been to reject birth control, so the other methods will now come into play.
Remember, Canadian dollar (loonie) hit its all time low against the
US dollar, 65 cents, in early 2002...as Bush's tax cuts and budget deficits
took off. The Canadian $ today is right around 1 US dollar, I believe.
The Republicans' poor stewardship of the economy is a big reason
why oil and gas prices are where they are today and don't forget it.
If American government can be more responsible with its fiscal policies under Democrats like it was under Clinton, and we get a handle on budget deficits, we can slowly improve the dollar's value again .
We have to pay the bills.
The only thing the ultracons' nonsensical "starve the beast" fiscal ideology's ever accomplished is ever-higher budget deficits.
The neocons "starve the beat" is really a smokescreen for "socialize the costs".
The beast we each should strive to starve are large corporations such as Starbucks that offer very little benefits to the communities they reside in. Everything needs to be re-localized or else we will watch communties that save their starbucks perish.
Save Our Starbucks is pathetic. People are utterly clueless about the long term impacts corporations' outlets have had on their communities. By saving a starbuck they demonstrate that they do not know how to make their own freaking coffee. JFC!
And they demonstrate they are clueless about how the cost of a starbucks is socialized into their community. Put it this way: if everything were local the land, air and water would be clean and renewed for generations to come.
Starbucks needs to the first of many to go.
Self-inflicted I'm afraid.
You had the chance to elect Ron Paul, but you happily let the MSM put him in the 'fruitcake' category while they pushed the money guys.
Unfortunately, since Bretton Woods, the world can't watch the US dollar sink below the waves without sinking with it. Some bright spark had the great idea of using the US dollar as the benchmark in a credit economy in lieu of the old gold standard.
You go down... we all suffer. Thanx George.
Thats great.. I say on this site all the time to the people suggesting how Americans will soon take to the streets in uprising, that all Americans will now take to the street for is if they are being given free ice cream.
I was recently in Paris and practically no Americans...
We are not welcome elsewhere, and for a good reason- the war.
Actually, surprisingly, I find I am pretty much welcomed with open arms everywhere I go, they just tisk tisk you when you say you are American, of course my first words are my presidents and a**hole, which helps.
I think it was the $50 quiche lunches that are keeping Americans away.
I generally agree with your arguments but keep in mind that Starbucks is not exactly the best barometer. A $5 latte is a luxury item and Starbuck's business model has been based on obscene markup. Now the falling dollar is pecking away at their profits. Gotta keep shareholders happy so you either raise prices (ain't gonna happen) or cut cost by closing stores.
When McDonalds announces a 10% reduction in their resturants then I'll start crying "depression!".
"Tell me again... I don't think I understand. Why is Starbucks closing 600 restaurants?"
Because the U.S. dollar isn't worth the paper it's printed on.
The average American don't see it as the dollar going down, they only see prices going up. For a minute, they wonder "how come this is happening?" then they shrug and go back to some supposed "news" about Britney Spears or Paris Hilton's lack of undergarments.
is boston going to host a coffee party like they once hosted a tea party?
are we going to go the way of the Roman Empire?
the once glorious Spanish Empire?
and
The British Empire?
Are we going to become a second rate power?
Well..., I guess if we do..., we have only ourselves to blame.
Too much borrow and spend
Now foreigners would rather their transactions be made in Euros rather then dollars except for petroleum
If the petrodollar goes down and is replaced by a petro-euro, then we're in real trouble
Foreigners are losing faith in our financial viability
So am I
Anyone for another tax cut? And freak foreigners out even more?
Time to invest overseas
So drink up while you still have a chance
Its more like going the way of the old Soviet Union. Except that the Russian people already knew how to be poor. Americans have a steep learning curve ahead. Save our Starbucks? Hahahaha
And they had oil to get themselves out of it eventually.
Good article,
"In a few years time, it is quite possible that Americans ... will be ... manufacturing products that will be shipped overseas to China ..."
What manufacturing products would they ever want from us?
What they need is raw material like lumber, grain, and minerals.
A recent article in Business Week indicated that it costs more to ship goods from China to the US than it does to produce them.
This is good news because we will shift to a system of "local manufacture for local use."
We will have a diverse economy once again, powered by solar energy.
Here is the history told in a personal way...I used to buy Starbucks coffee in the early 90s at one of the first originbal stores at Pike Place in Seattle. The coffee was really really good. People lined up like they were waiting for a fix. But it was expensive, especially for a graduate student, something like $2. I could either grind and make my own great Italian perked coffee at home, or, buy really good |Starbucks and it was a choice I made.
Now the coffee costs more than twice the amount. It is not any good anymore! Firast sign something is going wrong with Starbucks...no one in Seattle wants to drink it anymore...when I have a meeting at a coffee shop in Seattle, it is at a little local mom and pop place or SBC or asomething.
I also used to shop at the original Whole Foods in Austin....now it is hard to find the organic produce...so my advice...make your coffee at home...and grow a garden, join a coop!!!
The cost of ingredients is a miniscule portion of the Starbuck's price tag. While the dollar is certainly declining, the huge increases in crude oil and food commodities is primarily do to the froth money, created by the Fed's idiot policy, is fleeing the housing bubble and going to the commodities bubble. Other currencies are also affected. But not to worry. The slow but inexorable grinding of the machinery of deleveraging and deflation will evaporate this virtual money, and commodities will sink back in price as we shift into Great Depression II. In five years a frapuccino will be only two dollars. So will your hourly wage.
So I'm still paying 5 bucks for my latte, but now Starbucks has to send 4 of them to Ethiopia or Columbia to pay for the beans with the worthless dollar. That explains the store closings.
Welfare for the rich has consequences. Bail outs have consequences. Our dollars go down in buying power.
Wages have consequences. No money, no buyers.
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