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.

Follow Max Keiser on Twitter: www.twitter.com/maxkeiser

Comments

[isis]

One of my kids just returned from studying overseas. Not only did the dollar get progressively worse during the stay but the anti-US graffiti could be an indication that even if we make products people are not going to want to buy them because they dislike us.

[brooonie]

Fighting to save ridiculous luxuries while we ignore the demise of our Constitution? Sounds like modern American society to me.

[Angel1961]

I stopped going to Starbucks 2 years ago after viewing a documentary called "Black Gold". It covers the coffee industry. The people who grow coffee beans in Ethiopia are paid such an obscenely low amount for their harvest that they cannot survive. Something ridiculously low like $30 for 60 lbs of coffee. These same people are so poor that they have to go to "Therapeutic Feeding Centers" to get bags of rice and other food donated by the USA and Oxfam. Meanwhile we pay $4 for a cup of coffee. All the money gets sucked up by 4 corporations who control 100% of the trading and set the prices. Starbucks and Nestle were 2 of the middlemen. Let Starbucks go out of business. I have no sympathy for them.

[Atticus]

Dunkin' Donuts doesn't seem to have a problem, and their coffee is much better.

[speranza]

Starbucks is very successful in Europe and is expanding here. Europeans like the high quality of their coffe in a decent clean surrounding. Even in quality spoiled Switzerland Starbucks is a success story! But prices here are more than double than in the States and the success goes on. I just come back from a longer stay in Canada and I noticed that Starbucks is elmost empty everywhere. Starbucks serves by far the best coffe and is top of the pricechain, but still very cheap campared to European prices! A tall Americano (two shots of espresso) costs $ 2.31 only in Canada. In Switzerland more than double at $ 5.60! In Canada the competition is fierce with outlets like Tim Hortens, Timothys Worldcoffee, Second Cup, Lettieri etc. all serving "coffee" cheaper. To me and probably most Europeans this is not Coffe, it's some watery stuff tasting of sawdust..! So Americans just want hughe quantities of "coffee" (whatever that is..) almost for free!

I totally agree with the author, the price of 8 years of BushCo failure in every aspect, will be very high indeed! So, just screaming for cheap and more oil and cheap and more "coffee" is not the right answer! The answers are a bit more complex and some of them will be very painful!

[joebhed]

Regradless, Dunkin Donuts has really decent coffee at prices that most of us can still afford.

[ptah]

I just love the analogy of a dumb snowman in the sno-globe being shaken and shaken, it never protests no matter how harsh the treatment. Great article, thanks.

[salimfadhley]

This asymmetric loyalty seems so painfully misguided. These people who are fighting to keep starbucks in their town are like prisoners fighting for the privilege of nightly lockup. It's so bizarre that anybody could connect emotionally with a brand that sells shrink-wrapped coffee from soulless pre-fabricated stores.

Irony aside, the notion that communities are banding together to save starbucks of all companies shows what preposterously short-term memories citizens now have. Where were they when the sustainable local shops that the bull-market propelled starbucks displaced? They were probably too busy enjoying their sugar and caffeine high to notice that their local economies had been replaced by globalised command and control economies and that even stuff that we Europeans take for granted like the ability to go out and have a meal or a freshly prepared coffee is now dictated by uber-managers in far-away Seattle.

[Nommo]

Let no one say that Americans don't know where their responsibility lies. Or what lies define said responsibility. America is still waiting for its first great Starbucks cafe written novel. What, no Harry
Potter for this side of the pond? That's at least 600 less monkeys pecking away at overheated and powdered cinnamon stained keyboards. To venti or not to venti, that is the question, whether 'tis nobler
to slurp quietly or not go gently into that caffeine deficient locality.

Do not sit until you hear the blast of their steam vessels. Perish forbid your old steamed milk hangout become yet another PetCo puppy mill.